Been interesting to see the write ups in the AFR on this which have largely been sceptical on the valuation.. There was a piece today then from a GYG shareholder and VC investor (the chief investment officer of the Defender Ventures Innovation Fund) that I read hoping to get some balance in the views and to understand the positive side of the story. But I was left massively disappointed.
Main points focused on 1) GYG has a charismatic leader with clear communication and this has managed to bring in the a lot institutional investors, 2) GYG is smaller than Chipotle so has more room to grow, 3) passive index funds will be forced buyers once escrowed shares are released.
None of these seem very convincing arguments. I was really hoping for some more on why it could continue to grow and not be impacted by cost of living headwinds.
The second last line in the article (emphasis mine) really has me struggling though:
"Success for Guzman y Gomez is largely guaranteed, and if you take a medium-to-long-term view, then the price of the IPO is less relevant."
These seem like flimsy arguments to me.. Nothing in life is guaranteed and the price is really bloody important. You can't just gloss over price and say in the long term it will be okay.
(20min delay)