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Fool UK
Recs
Zombie IPO with negative book value and negative free cash flow: http://www.fool.com/investing/general/2012/08/14/attack-of-the-zombie-ipo.aspx?source=itxsitmot0000001&lidx=3
Where do you think your money is going?
Interesting article, but the treatment of Chuy's Holdings is inaccurate. What it leaves out is that the company brought in approximately $79M in cash during the IPO, which they used to pay down debt. This was described in great detail in the company's SEC filings in advance of the IPO, and in their quarterly earnings since.
Once you factor that in, the company's tangible book value is positive. Also, most of the interest expense goes away, significantly improving the cash flow situation.
You seem to be more correct so far, but this stock still seems too expensive. Going IPO is usually about driving expansion. In this case all of the money was used for debt. Buying this IPO is about bailing the company out. I'm not sure where the funds will come from to drive future expansion. I've never been to Chuy's (which is one reason I didn't make this pick with real money). From the other comments they seem popular, however... a packed store is only half of the equation. You can pack a store by offering great value to your customers... that doesn't mean your making any money. Based on the accumulated debt coming into the IPO it appears to me that Chuy's isn't very good at making money off all of the people showing up to there stores. They might be able to get more money out of there customers by jacking up prices or reducing quality/amount served, but will they keep packing the stores if they do that?