The main corporate finance advice for much of 2021 was, like, “be a meme stock.” There were a lot of retail investors on Reddit looking to pour money into the stocks of companies whose executives catered to meme investors. If you were a corporate chief executive officer and you were willing to talk a lot about Bitcoin and Dogecoin and non-fungible tokens, mix it up on Twitter, and occasionally do Zoom interviews with no pants on, then retail investors would love you and your stock would go up. That would be good in part because then you could do an at-the-market stock offering and raise money to make your business better, but also because your stock going up is good in itself: The purpose of a public-company executive is to make the stock go up. Traditionally one does that with cash flows, but in 2021 the way to do it was with memes, and good executives adapted.
Now it is 2022 and the whole meme-stock thing seems to be dead? But “Do Meme Stuff” is still a chapter in the corporate finance textbooks, so you can still give it a try. In particular, if you run a publicly traded chain of strip clubs, it does make a certain sense to try to meme it up. All the elements are there:
- You run a chain of strip clubs, which has an obvious titillating appeal to a certain class of very online investors.
- Not wearing pants is pretty much the whole premise of your business.
- You can promise to accept Bitcoin.
- You can do non-fungible tokens.
- I don’t know, those are the main elements I guess, this is not particularly scientific.
The main counterargument is “no, it is 2022, this is over.” Still, I appreciate that RCI Hospitality Holdings Inc., which runs adult entertainment clubs including “Rick’s Cabaret, Jaguars Club, Tootsie’s Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Scarlett’s Cabaret, Temptations Adult Cabaret, Foxy’s Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, and Kappa Men’s Club,” went full meme this week:
RCI Hospitality Holdings Inc., which owns strip clubs and bars across the U.S., is bringing its earnings call to Twitter Monday as it tries to generate buzz among retail traders and boost its slumping stock price.
The novel approach to the quarterly call, typically a chance to present results and take questions from analysts, comes as the turbulent market is crushing retail traders, who proved their power to move equity prices during the pandemic meme-stock boom. Still, RCI sees social media as an inexpensive way to potentially broaden its shareholder base, according to Chief Executive Officer Eric Langan.
“We need more reach and we can’t get it through traditional banks,” said Langan, 54, who joined Twitter in February. “We spend so much time and money going after institutional investors, this is a much easier and much less expensive route.” …
To drum up buzz, it hired financial influencer account Litquidity, an online brand well-known among young Wall Streeters that boasts almost 900,000 followers on Instagram and Twitter, to run its social-media earnings call.
The Bloomberg transcript of the call is … mostly pretty normal? It seems like they mostly got the usual stock analysts dialing in to ask normal stock-analyst questions in a slightly less convenient forum. But there are some retail questions like, uh, can you sell the stock in the strip clubs:
Awesome. Hey, thanks, thanks for doing this, I’m new investor and really excited about the direction of the company. Eric, as you touched on obviously the the point of this Twitter spaces to get the individual investors excited and one of the things for me, it was a little disconcerting as such low trading volume.
And just one small thing that came to mind, is there any way without kind of crossing boundaries to get club billers potentially interested in becoming investors and some sort of, I don’t know maybe like some loyalty program or something like that, any thoughts?
Eric Langan, President and Chief Executive Officer:
We are doing our NFT which is will be our benefits program, but we also had a program back in the early ’90s called own a piece of the action and we amortize that we NASDAQ traded company and all the clubs and we’ve been talking recently about bringing that promotion back as well. And putting that back out into the clubs since so many individual investors are also the customers and are guests of our locations.
Or investors proposing people they’d like to see in the clubs:
Yeah, great quarter guys. And again, Eric, thank you for being so proactive within the community. I really appreciate it. As the younger guy experience in these type of clubs. I wonder if the team has looked into acquiring talent through venues like Twitch and YouTube, I’m not sure if you’ve heard of the names of up-and comers like Aiden Ross and — but any detail on that to kind of get the best talent through the door?
Sure. The stock was down about 3.7% as of noon today. Just doing a Twitter Spaces about NFTs doesn’t really work magic anymore.