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Krispy Kreme Doughnuts, Inc. Message Board

  • nctarheel89 nctarheel89 Jan 8, 2003 10:54 AM Flag

    Di_vur_se_fi is at it again

    As one poster previously stated, there are always two ways of looking at things. However, Di_vur_se_fi always looks at things in the most negative way possible. He is now ranting about the fact that KKD may not open the full compliment of franchised stores in FY03. Consequently, they may not receive up to a whole whopping penny a share in earnings in FY03.

    The hilarious thing is that when Krispy Kreme beats its earnings estimate (AGAIN), Di_vur_se_fi will then claim that KKD management knew that it was going to meet its earnings estimate without opening the franchised stores. Therefore, they decided to delay the openings of these franchised stores so that they could delay the earnings recognition associated with the opening of these franchised stores until the first quarter of the new year. There you go, Di_vur_se_fi. I�ve already given you your next topic for how KKD is managing its earnings.

    There are always two ways of looking at every situation, but when you strap on your �Di_vur_se_fi Goggles� (Trademark 2003), you can spin any business decision or simple business transaction and present it as an obvious attempt to manipulate earnings and defraud investors.

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    • You don't have to restate what the bears think, as we are all well aware that to you side, KKD can do no right. Time will decide and the market but I might mention that so far the market says you side is wrong. I to bring this up again but 22 months ago KKD was selling at 60 and it's now at 140 ( unadjusted for two 2-1 splits)(35-70-140)and it's been to 188 so on wall street and in the real world if you consider a triple any proof whatsoever, KKD has performed very well indeed. It's only in your dream world that KKD has missed and overstated and cooked the books and been a pyramid scheme.

    • mikem, I always have to double-check your alias because sometimes I can't believe that the things you post are intentional and not the work of some adolescent imposter. You wrote:

      << One point I want to clear up -- you say - despite their poor cash flow---- KKD had no debt and still wouldn't have any except for their not being able to do that synthetic lease which was objected to by the idiot purists. >>

      Well, actually KKD DID do a synthetic lease, but backed out of it when they realized that the "idiot purist" investing public actually had their eyes open on that issue. If it hadn't been for the Enron fiasco, that synthetic lease would still be there, hiding the off-balance-sheet accounting which was the original purpose.

      << But, they have taken on no debt in rolling out all these stores and all this expansion other than the Ill. facility. >>

      They may not have debt in the conventional sense, but they have plenty of liabilities in the form of guaranteed loans for territory developers, growing accounts receivables, etc. Take a look at the history of Boston Chicken for more insights.

      << I would say, KKD displayed superior Cash Flow because they are financing all their build out all by themselves out of Cash Flow and no, they won't be paying dividends any time soon, because they need every dime they can get to expand each year. >>

      You're kidding, right? "Financing all their build out all by themselves out of Cash Flow"? Their buildout is more like a giant pyramid scheme than a growth plan, and they certainly aren't using their cash to build every new store (by the way, 80% of new stores are franchises, according to KKD). The franchisees are assuming some of the risk, to be sure, but with KKD's many generous guarantees to developers, the shareholders are to a large extent holding the bag.

      << It's called Growth. It's the kind of problem we stockholders want our companies to have. You shorts who constantly harp on KKD lack of Cash Flow really show your ignorance on this issue. >>

      If KKD really depended upon cash flow to expand, they would still be a few mom and pop doughnut stores in the southeast. They were fortunate enough to have pulled off a successful IPO at just the right time, which is really the only reason they have been able to finance what growth they have had in company stores to this point. Beyond that, they are totally dependent on franchise partner funds and/or a secondary offering to generate the needed cash for their future expansion plans. Cash flow ain't gonna get it done.

    • One point I want to clear up -- you say - despite their poor cash flow---- KKD had no debt and still wouldn't have any except for their not being able to do that synthetic lease which was objected to by the idiot purists. But, they have taken on no debt in rolling out all these stores and all this expansion other than the Ill. facility. I would say, KKD displayed superior Cash Flow because they are financing all their build out all by themselves out of Cash Flow and no, they won't be paying dividends any time soon, because they need every dime they can get to expand each year. It's called Growth. It's the kind of problem we stockholders want our companies to have. You shorts who constantly harp on KKD lack of Cash Flow really show your ignorance on this issue.

    • Hey- Just tuned in to this board. I caught an article from "Bloomberg" (12/21) that said that 5 insiders have recently sold over 695k shares of KKD, so maybe it means something, maybe not. The last time this much "insider" sales took place, Dec 01, the stock took a 27% hit. You hear anything?

    • mikem, you wrote:

      << I guess your confused once again which is very normal for you shorts-- I was referring to you shorts never being right about KKD disappointing in their earnings reports - all the terrible things you have predicted over the past two years and none of them has ever come true. >>

      I have never predicted that KKD would disappoint in any particular earnings report. In fact, I have applauded KKD's apparent expertise with creative accounting.

      << KKD continues to beat their estimates by a penny every quarter and guide higher at least half the time and has never missed a quarter yet. What is it about this that you don't get?? I can simply it for you if I must!!! >>

      Again, it is easy to look backward and see that KKD has beaten estimates by almost exactly a penny each and every time. It is also easy to understand how KKD is able to do this, despite poor cash flow, slowing projected growth and basically borrowing from future results to sustain current momentum. Past earnings reports do not always accurately reflect the efficacy of the business model, and they have little to do with the direction that the stock is likely to take in the future. Need I list the large number of companies in recent years which exemplify this simple premise?

      The fact remains that shorts have NOT been "100% wrong about KKD for years now" as you claimed, whether you were referring to earnings reports OR stock price. Shorts realize that earnings reports can at times be deceiving. Do you?

    • I think it's called "DENIAL."

    • I guess your confused once again which is very normal for you shorts-- I was referring to you shorts never being right about KKD disappointing in their earnings reports - all the terrible things you have predicted over the past two years and none of them has ever come true. KKD continues to beat their estimates by a penny every quarter and guide higher at least half the time and has never missed a quarter yet. What is it about this that you don't get?? I can simply it for you if I must!!!

    • mikem, you wrote:

      << KKD has never disappointed. I repeat!! KKD has never missed an earnings report despite all the rantings and negative crap you shorts have come up with. You have been 100% wrong about KKD for years now!! If you are ever right I rue the day as I will sure finally have to eat some of my words, but, so far, the people eating their words on this board every quarter are the shorts who just don't have a clue. >>

      You have now seen the evidence to the contrary:

      Opening price on 01/02/2002: $44.25
      Closing price on 12/31/2002: $33.77
      Source: wallstreetcity historical quotes (yahoo won't allow me to post the link)

      In light of this evidence, would you care to retract your statement that shorts have been "100% wrong about KKD for years now"? Or do you continue to stand by this statement, happy to let your reputation ride on its accuracy?

      While you're contemplating your answer, let me ask you another question. What is the goal of investing in a particular company? Is it to enjoy the thrill of good earnings reports, or is it to make money? If you believe the former, then being long this stock may make sense. But if you believe the latter, then you should realize that good earnings reports, by themselves, do not guaranty that a stock will go up in the long run. You need only look at the 2002 historical chart to confirm this.

      Price is always a factor.

    • My chart show KKD has gone from 27 to 40 and now is around 35 over the past 3 months. That shows it was up 50% just after earnings and is still up 8 points or 30% off the Oct. low's.

    • <<Maybe I'm reading this chart wrong, but it looks to me like KKD has gone from 44 to 34 in the past year. That's down 23%. This can be calculated by dividing the price change ($10) by the beginning price ($44).

      This doesn't seem to support the assertion in your post that shorts "have been 100% wrong about KKD for years now!!">>

      LOL...Don't argue with Mikey, he uses his own numbers (unadjusted for splits or something like that) and his charts are up.

      Will
      (Will has no position in KKD)

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