Activist investors take a nearly 12% stake in Red RobinActivist investors take a nearly 12% stake in Red Robin

Joanna Fantozzi

Two activist investors have taken an 11.6% stake in Englewood, Colo.-based Red Robin Gourmet Burgers, according to a document filed with the U.S. Securities and Exchange Commission last week.

JCP Investment Management purchased 7.9% of Red Robin’s total shares, while private investment firm Jumana Capital bought 3.7% of the casual-dining chain’s shares, causing a bump in Red Robin’s stock price last week.

Both investment firms have long histories of becoming activist investors in struggling companies. Just over the past decade, JCP Investment took an activist investor role in Jamba, Potbelly, and Pollo Tropical owner Fiesta Restaurant Group, the latter of which was eventually sold and taken private. Jumana Capital, however, is more known for its investments in data, engineering, and technology companies.

According to the SEC filing, both investment firms made the investment in Red Robin because they believed that “the shares, when purchased, were undervalued and represented an attractive investment opportunity.”

Red Robin had been navigating a tough time for the brand when the company unveiled a comeback plan during January 2023 ICR conference. This was all part of the casual-dining brand’s “North Star” plan to get back to its glory days, which included plans to elevate the guest experience, remove costs and complexity, and drive revenue and profitability. 

Related:Red Robin’s chief technology officer Jyoti Lynch is leaving the company

However, as NRN noted last month, this plan has hit some roadblocks — chief among them, a more cautious consumer spending environment. The casual-dining category has been particularly impacted by consumers fighting inflation. Red Robin’s stock has been down nearly 60% year-over-year, but the company’s executives remain optimistic due to initiatives like a revamped loyalty program.

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