Trouble in Round Rock?

Dell's stock hit a three-year low this week.
Sat September 29, 2012 2:01 am
AP Photo | Douglas C. Pizac

The Texas economy is one of the most robust in the world. Wildly profitable companies and ingenious entrepreneurs call this state home, and what happens here influences businesses around the nation. Here’s a slice of the profits, losses, big deals, and backroom decisions happening across  Texas this week.

The Depths of Dell
Dell’s stock hit a three-year low this week, and shares of the Round Rock­ computer maker have declined by more than thirty percent so far this year, according to the Austin Business Journal . The company’s profits also took a dive in the second quarter, dropping off by eighteen percent, and revenue decreased 7.6 percent. Last month the Austin Business Journal reported that Dell is planning “an unspecified number of job cuts” at its headquarters.

The Bottom Line : CEO Michael Dell is downplaying the potential impact of Microsoft’s new Surface tablet, its first foray into the hardware market. “I think the impact will be limited, given the number of units they expect to ship,” Dell told PC World earlier this week.

Boomer or Buster?
It’s game on for Dallas-based Dave and Buster’s, as the arcade chain is forecasting $123.8 million in proceeds from its anticipated IPO this fall. Monday’s projection is lower than its previous figure of $150 million, the Associated Press reported. The company “plans to use the offering's net proceeds to lower its debt by about $80 million and to pay related premiums, interest and expenses.” Its new NASDAQ ticker symbol will be “PLAY.”

The Bottom Line : Dave and Buster’s was publicly traded from 1997 to 2006 before changing ownership several times, according to the Los Angeles Times . While individual stores did fairly well in 2011 — netting an average of $9.8 million apiece for locations open more than a year — “the company suffered net losses in each of the past three fiscal years,” the newspaper reports.

Bienven-eat-os
Antonio Swad, owner and founder of the Dallas-based pizza chain Pizza Patron, was featured this week in a Bloomberg Businessweek column about the growing number of restaurants marketing to Hispanic customers. The company is set to open its first Midwest location in October, and Swad hopes to eventually open 1,000 stores in the U.S. — right now there are 101.

In recent years the company has run afoul of some conservative groups that oppose the restaurant’s policies of accepting Mexican pesos and offering free pizza for customers who order in Spanish .

The Bottom Line : Despite the controversy, the marketing strategy appears to be working: Pizza Patron has increased sales by 77 percent in the last five years, compared to Pizza Hut’s revenue growth of 4.9 percent, according to Bloomberg Businessweek . And that may be part of a larger trend:  “Hispanics have increased their restaurant spending faster than the rest of U.S. diners” in the last decade, spending 33 percent more on food away from home in 2010 than they did in 2000.

Winner of the Week: Space Geeks
A Dallas auction company is giving collectors a chance to buy their very own piece of space. Heritage Auctions plans to sell 125 meteorites to the highest bidders on October 14 in New York, the Associated Press reports. Highlights of the collection include a rare moon rock valued at $340,000 to $380,000 and a meteorite resembling the person in Edvard Munch's painting "The Scream," worth an estimated $175,000 to $225,000.

Loser of the Week: Texas Brine Co.
In a report released Monday, Houston-based Texas Brine Co. attempted to distance itself from the collapse of a Louisiana cavern it plugged and abandoned in 2011. The August 3 cave-in created a four-acre sinkhole, prompting the evacuation of more than 150 homes. But federal and local officials are questioning the report , which concluded that seismic activity in the area caused the collapse. According to the Associated Press, “officials at the U.S. Geological Survey say the cavern's failure caused the tremors — not the other way around.”

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