Wingstop Shorting Opportunity: Huge Lockup Expiration Coming Up

Wingstop Inc. (NASDAQ:WING) – Sell or Short Recommendation – $19.75

December 9, 2015 concludes the 180-day lockup period on Wingstop Incorporated.

When the lockup period ends for WING, its pre-IPO shareholders, directors and executives will have the chance to sell their ~22 million shares.

We previewed WING’s June 11th IPO on our IPO Insights platform.

The potential for a sudden increase in stock available in the open market may cause a significant decrease in share price and opening a short opportunity for experienced investors.

Business Summary: Operator and Franchisor of Restaurants that Specialize in Made-to-order, Hand-tossed Chicken Wings

Wingstop Restaurants is a chain of fast casual restaurants that serve buffalo-style chicken wings as the main menu item. Wingstop restaurants are located in the United States, Mexico, Singapore, Indonesia, the Philippines and the Russian Federation. Its menu features chicken wings, both bone-in and boneless, and strips as meals, sides and individual combos. Generally, Wingstop is credited with initiating the trend towards fast casual restaurant shops offering chicken wings as the main menu, versus the popular fare offered as appetizers in bars, pubs and full-service restaurants.

After opening the first Wingstop restaurant in 1994, the company incorporated in 1996. Wingstop has been selling franchises since 1998. Earlier this year, the company had 726 outlets, of which 97 percent are franchises. Customers can place orders online for take-out meals, and the average transaction in 2014 equaled $15.61.

Wingstop has opened a total of 95 net new franchises in 2015 through the end of the third quarter, and the company expects to reach a total of 125 to 130 net new restaurants this year for an increase of 18 percent in unit growth. Same store sales have been positive for 12 consecutive year, and the company celebrated its 800th store in the third quarter. Wingstop noted in its financial highlights for the third quarter that its overall strategy is to open approximately 2,500 units domestically.