Buying Stocks in The Grilled Cheese Truck Is Probably a Bad Idea

The Grilled Cheese Truck quietly hit the over-the-counter stock market in late January starting with a ridiculous $108 million market capitalization from the $6 initial stock price. As of February 12, the price per share is now down to $4.60, a reduction of 23%. Where the heck did this upstart food truck get the gumption to go public despite a horrid balance sheet and income statement?

Let's start with the basics: The Grilled Cheese Truck (GRLD) starting rolling in Los Angeles during the height of the food truck boom in 2009. The Ft. Lauderdale-based company now has four trucks (read that, FOUR), with two in L.A., one in Ventura, and another in Phoenix, Arizona. How does it make any financial sense that this brand managed to attract that much market capitalization?

There are plenty of detractors who are wondering the same thing. Despite being "the largest operator of gourmet grilled cheese space," which is a pretty weak statement, the company has $1 million in assets and a whopping $3 million in liabilities. Pair that with sales of $1 million and a net operating LOSS of $900,000, this irrationally valued company might be proof that investors really have no idea what they're doing when it comes to investing in food companies. That is, unless you're talking about the massively successful Shake Shack IPO that hit the markets two weeks ago.

Just think about how ridiculous this sounds: at its current valuation of $83 million, each of the four Grilled Cheese Trucks is valued at $20.75 million dollars. It's virtually farcical. Every lonchero is aghast at that valuation. If there wasn't enough proof that there's some kind of bubble happening in the stock market, GRLD's stock is exhibit A. Or maybe The Wolf of Wall Street is back hawking this stock to clueless investors.