Rick's Caberet…Three Cheers for NO 'POLE TAX'

Posted by Howard
on March 31st, 2008

I was turned on to The RICKster (RICK) as I like to call it now, but my buddy ‘Gin’ Phil. Turned out to be almost a four bagger. It has pulled back to the low 20′s and I sold some all the way up, but I still keep a piece. I barely check in. Below $18 I am gone on the rest.

Today it won a case in Texas that would have created a ‘Pole Tax:

RICK Rick’s Cabaret: Texas Judge strikes down “Pole Tax” as unconstitutional; could provide substantial boost to RICK’s Q2 results – Merriman (25.00 )

Merriman says on Friday a Texas state district judge struck down the $5.00 fee imposed on patrons visiting strip clubs, or “pole tax” as unconstitutional and said that it taxed “expression that, while politically unpopular, is nevertheless protected by the First Amendment.” This bill was passed by the Texas state Senate in May 2007 and went into effect on Jan 1. Firm notes RICK’s has been collecting extra fees since Jan 1 to fund the $5.00 “pole tax” without seeing any impact on customer traffic. However, until now, that $5.00 per guest charge has been placed in escrow pending the outcome of the judge’s ruling that came on Friday. Given that the ruling came before the end of 2Q, firm would not be surprised if RICK’s decided to release those escrow funds into Q2 rev and earnings (at 100% margin). Firm ests this could boost 2Q EPS by $0.06-0.08.

Wierd but the stock is down big today. Must be fear of the ‘Boner Tax’. Thanks Phil for the update and classic sense of humor.

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