Jake's Blog

My Online Journal

Keep It Private

Companies love going public on the stock market; its a great way to raise capital for the company so that the company can invest in other things. Its like a public loan. However, like all loans, they need to be paid back in full.

Lets look at McDonald’s. Have you noticed anything about them in the past 20 years? What is on their $1 menu? Fries? A soda? No. Pretty much nothing is on that menu anymore, and they have now made it a $1 – $3 menu, which contains essentially a McChicken, small fries, an apple pie, and a soft drink. Of course, not in any combo meal, each of those items are closer to $3 than they are closer to $1. Remember when Big Macs were used to evaluate the impact of inflation? You can’t do that now. Their business model has changed from being cheap, fast food to being just expensive piles of shit-meat. How does this have to relate to their stock, and what proof do we have that their model has changed?

Being a public stock means that you have to make the investors happy or else you lose out on a lot of money. This means that keeping profits steady, or increasing. So when COVID happened, even though fast food was doing very well, they needed to make even more money, as just doing great was expected, so it wouldn’t make their stock boom enough. So what they did was leverage the inflation as an excuse to mark up their prices a fuckton. Now, their burgers cost about as much as one you can get at a sit down restaurant, and one of those two doesn’t taste like meat I would feed my dog. But this is great for their bottom line, as they get to outperform the expected quarterly earnings.

Somehow in the mix, they forgot the very basics of price and demand, so when customers have been dropping and their quarterly earnings aren’t killing anymore as more and more people are opting in to sit down restaurants that have takeout, they are bleeding money. McDonald’s recently announced that they are going to be lowering their prices. It isn’t like inflation has decreased; just the rate that it has been increasing has decreased. So the prices increasing was just an excuse.

Now lets look at Chick-Fil-A. They are privately owned, so during the pandemic they had nobody to impress. They hardly raised their prices, and business boomed. They made presumably a lot of money, without compromising on the customer base after the fact. Their service and food has remained high quality over their years, and have kept true to their company promise of great food and customer service, unlike McDonald’s, which had the promise of good prices.

Now if you could choose to eat at McDonald’s or Chick-Fil-A, which would you choose? Publicly traded companies have no soul, and open themselves up to the corruption of wallstreet. I’ll stick to Chick-Fil-A.

Shit.

Its Sunday.

Leave a Reply

Your email address will not be published. Required fields are marked *