View Zac Bissonnette’s Blog DeepValues.
Atari and Chuck E. Cheese founder Nolan Bushnell’s latest venture presents a compelling opportunity for investors. Uwink (OTC BB: UWNK) recently opened up its first restaurant in Southern California. It features entirely automated ordering done on a computer located at each table, which is also equipped with various “social video games.” The restaurant has received some good press so far, and has several competitive advantages that I think are worth noting.
Uwink plans to begin announcing franchises sometime this quarter, and I think Uwink is uniquely well-positioned for this. The company owns all of its own technology, and is the only company that has anything like it. In the restaurant business, very few of the up-start players have anything of value to offer their franchisees. Uwink has a unique concept that no individual would-be restauranteur can easily duplicate. Anyone can start a hot dog stand. No one else can set up a restaurant like Uwink.
The stock has had quite a run-up of late (from 30 cents in August to $1.85 before the current pull-back), but with a market cap of 25 million dollars and outstanding catalysts in the foreseeable future, it has a lot of room to run. It’s also interesting that the management hasn’t been selling.
Particularly encouraging is a discussion with Uwink’s corporate staff. I spoke with a representative this weekend, and he told me (something to the affect of), “We are not worried about the stock price. This is not a story stock. It’s not a stock promotion. We have opened one great restaurant and are fine-tuning it and working on expansion. We can drive the fundamental growth of the company and the stock price will follow.” It’s refreshing to hear management at an OTC stock with such a cerebral, long-term approach. Patient investors may reap substantial rewards, and the risk appears to be small. At the very least, I certainly wouldn’t bet against the founder of Atari and Chuck E. Cheese when he decides to start a restaurant with video games.
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