Wake Up With the King

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BK Storm is a tasty new treat being tested at select Burger King locations. The blended blur of vanilla ice cream, chocolate syrup, and Oreos is clearly the second leading burger chain's answer to things like the Blizzard at Berkshire Hathaway's (NYSE: BRKa) Dairy Queen.

The other BK storm brewing involves the company gearing up to go public Thursday with the BKC ticker symbol. With early reports indicating a healthy response to the company's initial pricing of $15 to $17 -- with hints that the overly subscribed deal will be priced closer to $17 a share -- it's easy to get excited about a brand-name IPO.

Don't.

At least don't be tempted to dive in without doing a little due diligence on your own. Burger King remains a troubled company. Some investors, in fact, may be shocked to find that the vast majority of the proceeds being raised aren't going to BK's operations. That money will go to finance a $367 million dividend paid out back in February to the private equity firm insiders in anticipation of the IPO.

BK isn't breaking new ground here. Warner Music Group (NYSE: WMG) did the same thing just before last year's IPO, too. But companies can redeem themselves. Warner has. Still, it can't leave a good taste in the mouth of tomorrow's new investors. Even after the IPO, the company will have a negative book value, and that, too, is about as tasty as a meatless Whopper.

With ants.

Burger King had filed to go public three months ago, and this will be the company's first time as a standalone public company. It has had an eclectic collection of foster parents in the past, including Diageo (NYSE: DEO) and General Mills' (NYSE: GIS) Pillsbury unit. The company's last sale was four years ago, when the consortium of private equity firms joined to acquire the burger giant for $1.5 billion.

These haven't been exactly the best of years for Burger King. Despite rolling out a memorable marketing campaign starring The King -- a character who rivals only Ronald McDonald when it comes to the creepiest fast-food mascot -- the company has struggled to define its identity.

Because of the baggage, gains are likely to be kept in check until the company is able to get a few winning quarters under its belt as a public company. This is in no way like the Chipotle (NYSE: CMG) IPO that captivated the market by doubling at the open because of the company's growth prospects. Instead, BK is going public as a turnaround play. That translates into an offering where time will be the choice seasoning before investors bite in and realize what the company is worth.

There is a lot of potential here, but quite frankly, you'd be better off sticking to some of the turnaround plays that Philip Durell is recommending to Inside Value subscribers. Less fat. Less bitter aftertaste of raiding the till before going public. More flavor.

No ants.

Longtime Fool contributor Rick Munarriz does patronize Burger King often, since it's a local company, but he is not going anywhere near this IPO for now. He does not own shares in any of the companies in this story.The Fool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.