OPINIONFinancing

When chains go from sizzle to fizzle

Restaurant Rewind: Dutch Bros’ stock price dropped 37% in a day last week. It’s far from the only public restaurant chain to go from an investor darling to a source of Wall Street consternation in one trading day.

One of the downsides of being a public company is the fickleness of Wall Street. If investors so much as suspect a holding will fall short of expectations, they’ll mercilessly hammer down the value of a high-flying issue, even if the business fundamentals remain largely unchanged. They can fall in and out of love as easily as a teenager.

A case in point: Dutch Bros, the drive-thru coffee chain that lost 37% of its stock value in a single trading day because of a decline in comparable store sales for the first quarter.

In this week’s edition of Restaurant Rewind, the RB podcast that delves into the industry’s past for a deeper understanding of what’s happening today, host and RB Editor-at-Large Peter Romeo looks at two past instances of an investment darling going from sizzle to fizzle in a flash.  

The familiarity of those brands is a testament that restaurants are a business of peaks and valleys. But see for yourself by giving a listen.

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