Houston's JCP Investment Management, which owns roughly 2% of The Cheesecake Factory Inc. (CAKE), has recommended that the company explore the possibility of spinning off three of its smaller brands, as reported by the Wall Street Journal, citing sources informed on the matter.
The activist investor has proposed that the Cheesecake Factory's leadership consider forming a new company by separating their North Italia, Flower Child, and Culinary Dropout restaurant brands. JCP argues that this strategy would allow management to focus on accelerating growth and meeting their financial objectives. Furthermore, JCP has indicated its readiness to inject capital into the newly independent entity to aid in its growth.
Shares of CAKE concluded Monday's standard trading session at $42.45, a decrease of $0.57 or 1.32%. However, in after-hours trading, the stock experienced a rise, gaining $2.05 or 4.83%.
