PLAY - Why Dave & Buster's Stock Plunged 22% Today
Shares of Dave & Buster's Entertainment (NASDAQ: PLAY), which owns dining and entertainment centers, fell dramatically on Thursday, declining as much as 22% in the first half of the trading day. A news article from a major financial publication drove the decline, but it's really the big picture that's the problem.
At one point in time, before the global pandemic, Dave & Buster's business model of mixing food and entertainment, in the form of video games, was seen as a plus. The internet couldn't replace the full experience that the company offered patrons.
But when COVID-19 led to the shuttering of nonessential businesses, Dave & Buster's sales came to a virtual halt. Even though the company has started to reopen its restaurants, the lingering impact from the coronavirus is still a major headwind. Simply put, customers are leery of going into a group setting where everyone is touching the same games. It's an understandable fear, but it puts the entire Dave & Buster's concept into question.