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Was Endless Shrimp to Blame for Red Lobster's Bankruptcy?
Manage episode 420585060 series 2851541
Red Lobster was America’s largest casual dining seafood chain, with almost 600 locations across the United States and Canada. Its bankruptcy was announced earlier this week.
The bankruptcy declaration insinuates that the chains equity owner who was also their biggest seafood supplier might have decided that their equity stake in the business was worthless, but that they could extract some extra value from the company before it declared bankruptcy by selling them a lot of extra shrimp, leading to the uneconomical "Endless Shrimp" deal at Red Lobster.
The decision to make the $20-dollar endless shrimp deal a permanent menu item is said to have led to an $11 million dollar loss.
The bankruptcy declaration says that “the Debtors are currently investigating the circumstances around these decisions.”
Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
Corporate Finance: https://amzn.to/3fn3rvC
Patreon Page: https://www.patreon.com/PatrickBoyleOnFinance
Buy Me a Coffee: https://buymeacoffee.com/patrickboyle
Visit our website: www.onfinance.org
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
Patrick Boyle on YouTube
209 episodes
Manage episode 420585060 series 2851541
Red Lobster was America’s largest casual dining seafood chain, with almost 600 locations across the United States and Canada. Its bankruptcy was announced earlier this week.
The bankruptcy declaration insinuates that the chains equity owner who was also their biggest seafood supplier might have decided that their equity stake in the business was worthless, but that they could extract some extra value from the company before it declared bankruptcy by selling them a lot of extra shrimp, leading to the uneconomical "Endless Shrimp" deal at Red Lobster.
The decision to make the $20-dollar endless shrimp deal a permanent menu item is said to have led to an $11 million dollar loss.
The bankruptcy declaration says that “the Debtors are currently investigating the circumstances around these decisions.”
Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
Corporate Finance: https://amzn.to/3fn3rvC
Patreon Page: https://www.patreon.com/PatrickBoyleOnFinance
Buy Me a Coffee: https://buymeacoffee.com/patrickboyle
Visit our website: www.onfinance.org
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
Patrick Boyle on YouTube
209 episodes
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