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Krispy Kreme Doughnuts, Inc. Message Board

  • wrj103 wrj103 May 2, 2002 3:18 PM Flag

    More logic

    Let's assume that the analysts are right and KKD earns about $180 million of EBITDA in 2006. Let's also assume that they can continue to grow EBITDA at 25% per annum beyond 2006.

    At that rate, it wouldn't be until 2008 that KKD would "grow" into it's current valuation of $2 billion. Here's how I get there:

    KKD could generate EBITDA of about $280 million in 2008, which would make it reasonable valued at about $2 billion. That's assuming a 7x EBITDA multiple, which is what Diaego expects (and has received bids) for Burger King. But don't trust me, look it up for yourself and do the math.

    Will
    (Will is short KKD shares)

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    • <<I think KKD will fall when it becomes sufficiently obvious to people that its PE is
      excessive. KKD is basically a momentum play. When the momentum gives out, gravity
      takes over.>>

      kkd's PE has been pronounced "excessive" and its excess has been "sufficiently obvious" to people since its IPO over two years ago...your prediction has also been posted on this board and in the media a countless number of times since the week following kkd's IPO...theory based on excessive PE is worn out

    • I thought I've been reading on this board that most think momentum is already gone.

      You guys really need to make up your mind.

    • you wrote:

      ..should i then announce after each mistaken aeye id authorship that it was really strata that made the post?

      ---

      once is enough

    • you wrote:

      What about missing earnings or barely meeting them? KKD is priced for perfection. One even minor slip will cause a 20-30% correction, IMHO.

      All companies make mistakes at some point. KKD is not immune.

      ---

      Yes. Combined with krummy guidance.

    • Diverse one:
      What about missing earnings or barely meeting them? KKD is priced for perfection. One even minor slip will cause a 20-30% correction, IMHO.

      All companies make mistakes at some point. KKD is not immune.

    • I think KKD will fall when it becomes sufficiently obvious to people that its PE is excessive. KKD is basically a momentum play. When the momentum gives out, gravity takes over.

    • you wrote:

      the issue at hand is the belief that insider selling will cause the downfall of kkd...my point is that it did not in the last year and half, even though it was very prolific during that time period...the fact remains that stock did very well

      ---

      IMO, insider selling will keep a cap on the price (below $50 let's say) but will not cause its downfall. The downfall of KKD, if it occurs (and I think it will), will be driven by "news".

      Such "news" will be something like this (in descending order of likelihood, roughly):

      1) Reduction in planned store openings by area developers from 47 to something significantly lower.
      2) Buyback of multiple area developers
      3) Large secondary offerring
      4) Failure of an area developer
      5) One-time gains needed to make net income numbers
      6) Problems at Effingham opening
      7) Downgrade from one of the cheerleaders (BB&T, DBAB, JPM)
      8) Livengood resignation
      9) Accounting scandal

    • <<IMO, the price of KKD would be significantly higher (30-50% or more) had there
      been no insider selling during the past 18 months.>>

      ...probably a good basis for that opinion (KKD at $60+ ??? really???); however, the issue at hand is the belief that insider selling will cause the downfall of kkd...my point is that it did not in the last year and half, even though it was very prolific during that time period...the fact remains that stock did very well

    • <<Yes, it was obvious that this post was by strata. Other posts by aeye (any others?) were
      not so obvious; I don't recall you clarifying the relationship in the past. Maybe it was
      just an honest oversight on your part? >>

      ..should i then announce after each mistaken aeye id authorship that it was really strata that made the post?...i guess for those who are counting, it may be important...if the thinking of investors on this board changed due to this "obvious" coverup and the contents of the posts in the past, i pulled off one helluva coup, didn't i?

    • GOOD POINT..

    • View More Messages
 
KKD
20.20+0.43(+2.18%)Nov 24 4:07 PMEST

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