Token scars, broken cars, and spoken bars colored in the week that was.
Waiter, there's a mouse in my pie
You don't need to be a kid to enjoy Chuck E. Cheese. If you ever see the stream of young families pouring into these arcade eateries, overpaying for pizza while their kids blaze through a cup of tokens, it would make you smile, too -- if you were a shareholder.
Buy into Chuck E. Cheese? Yes, even the company knows it may sound like an embarrassing proposition. Perhaps that's why it masks its "cheesy" operation as CEC Entertainment
Revenue grew by 17% for the quarter, and even better, profits grew by 41%. Chalk it up to the beauty of the Chuck E. Cheese business model. It doesn't need to keep updating its games the way teen arcades do because kids have no problem tossing tokens into perennial favorites like Skee-Ball or Hungry Hungry Hippo. It doesn't have to worry about the cutthroat pizza-delivery discounters because it is catering to a captive audience and can deal with the hiccups in cheese and tomato prices.
So what's to be embarrassed about? It's a license to print money when it's doing well, isn't it? Come, now, CEC. Isn't it time you ripped away the initials and settled in as Chuck E. Cheese Entertainment?
When automakers lose their drive, does Wall Street turn neutral?
In this week's "We saw this coming from a mile away" moment, Ford
It's a pity. I'll bet these folks wish they could turn their automobile manufacturing plants into giant toddler arcades, with a costumed rodent making the rounds as folks scarf down pizza pies and salad-bar platefuls. Well, that's unlikely to happen. But as long as gas prices stay high, a cost-conscious country isn't going to dive into new leases on gas-guzzling vehicles. That's why Ford and GM have been doing worse than the rest of the industry, and it's also why they have been targeting their efforts at their smaller -- and suddenly more fashionable -- cars.
And while you're in that really tiny car, why not enjoy some really big tunes?
How popular is satellite radio these days? Pssst, very. Not only did XM Satellite Radio
Grandfathering in existing listeners -- and those who sign up this month -- who choose to prepay for extended plans was a brilliant move, but otherwise raising its subscription rate to $12.95 a month may not have been so wise. That's the exact same pricing perch that Sirius is standing on, and it's going to lead consumers to take a closer look at the competition now that pricing is no longer an issue.
Yes, XM has Major League Baseball, shock jocks Opie & Anthony, and a deeper playlist for its commercial-free music streams. But Sirius holds up well, with Howard Stern coming next year, NASCAR arriving in 2007, and NFL and NHL already in place. Will new radio fans pay $12.95 a month for XM? Absolutely. Both XM and Sirius are worth every penny. Yet it would have been nice to see XM price itself either higher or lower than its smaller competitor. The last thing this industry needs is for consumers to see price matching and assume that this is a commodity. It isn't. I'll bet my last shiny Chuck E. Cheese token on that.
Want to read more about the stories that rocked the week that was?
Until next week, I remain,
Longtime Fool contributor Rick Munarriz doesn't own any of the companies mentioned in this story, though he is a Sirius subscriber. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
