Skrappy

Breaking Up With Jamba Juice

Jamba was victim to a macro-economic issue. Following the Starbucks model would have worked for them if they IPO'd in the same era that Starbucks did. But in this horribly weak consumer-discretionary time (especially in CA) it is tough to bring in enough revenue to cover cost of capital. We will eventually see a massive re-pricing of commercial real estate and it will be easier for Jamba to realize profits with the same basic revenues due to decreased new-store opening costs. I'm holding for the long-term, while shorting CPKI as a nice hedge within the Cons-Discretionary CA sector.