Mutterings of a short to himself:
God this is painful. $49.78 as I write, up over a buck for the day! After yesterday yet. Unbelievable ...
Times 1200 shares is beginning to be real money ... there goes 6 months profit on this piece of nothing. Down the drain And who says it can't go to 100?? .. not me. It could. Do you really believe that? No ... Yes.
But its just a bunch of godammed donut shops hyped by a hillbilly. Books probably cooked. Donuts. Yeah ... and so? Its still bumping 50, heading North.
Financial chicken. Musical chairs. Hold out or cover now?
"The better part of valor ..."
"Live to fight another ..." bull
"He who hesitates..." -- heard that.
"He who sells what isn't his'n...." Don't say it.
And don't forget "limit your losses, let your profits run." Profits ... what profits??
Who ever said shorting was easy? "Only the valiant.." --- valiant or stupid? How about that "1000 deaths" bit? Coward.
Cover you sumbitches, cover. Run. Panic time. Let's get this agony over with. Push it to 100, I'll still be around. Oh yeah, and broke too. Dumb
Hang in there baby.
Now do you feel better?
No. The pain.
Still muttering, a short to himself....
Middle of the night realization that KKD at 100 puts old Diogenes in the
-- Selective perception. The longs/momentum honchos will take this as signal to buy buy buy. Me, I don't want to read it. Save it for later. Stomach already sour.
Earnings coming. Cooked once, cooked twice. Twice-cooked earnings. So what?? The price is what's killing us. Bumping 50. And the split -- means nothing, except to the longs. And to the price. Ouch. What ever happened to "buy on the rumor, sell on the news"?
And why the bounce Thursday/Friday? Shorts covering, sure. But maybe the Barron's article leaked ahead of time?? At least the subject leaked, cover story, taken as a plus no matter the article's conclusion. After all, no price is too high for a fad stock. Maybe 60 next week. Maybe not. Maybe. Will have to read the article.
Yet still at it....
Well now, how is it that some 6 million shares were bought the last three days on the price spike?? Some momentum players, for sure. Some technical traders, certainly. Some idiots, unmindful of valuation, an undying breed. But Short Squeezers putting the hammer to us poor miserable losers?? Not all that likely. Pretty risky, this late in the game. More probably a fair amount of short covering by The Faint of Heart. (Yes, and by those wise enough to cut their losses .... smart bastards)
So that accounts for the buying. But who was doing the selling?? Some short sellers, sure ... still at it, balls of steel. Longs taking their profits ... at some point, enough has to be enough, at least for a growing few among the self-satisfied winners... "hogs get slaughtered."
And what about the remaining Short Squeezers??? This game is pure musical chairs. They know the music will stop and increasingly wonder 'when?. Just don't be the last to jump the merry-go-round. At some point ... Hell, that Barron's article wasn't the hype expected.
.... Grasping at straws in your misery??? .... what else to grab? Is there anything else up there?
It also explains the cover of the annaul report. It's kind of a kiddy camp thing. They must have researched the demographic of the typical shareholder. It's a nine-year old kid. Grampa bought bought little Brianna 10 shares for her birthday (college money). The kid's actually up 250% on the stock. Krispy Kreme mails out 120,000 reports to these kids.
Your response to no_fear:
"Your still grasping at straws. Nothing has changed at Krispy Kreme funamentally -"
Nothing had changed at the Titanic either fundamently, until it hit an iceberg.
Take your pick. Will one of these or more be the iceberg for KKD.
1. Down on heavy volume 6 days in a row, although today not as heavy and down only $.05.
2. Analyst downgrading.
3. Revenue at new stores not as great and the quality not or to standard and service is poor.
4. Where's the cash and check out the addition of $30,000,000 in goodwill on quarter ending 5.02.03.
5. Lines getting shorter and no lines in many cases. Example, Santa Rosa, CA.
6. What a bubble looks like.
7. The no_fear volume review.
8. The Tulip question.
9. The P/E & P/S ratio.
10.More sellers than buyers.
Not is all bad at KKD. They do make a tasty donut, especially if has just come off the belt.
... continuing on ...
... O.K. so what are the Big Longs going to do? You say the top dozen hold some 24 million KKD shares at last report.
First off, they know there's little McAleer and Livengood can do if the negativity starts to snowball, and they won't stick around to see what develops. They'll do the only thing they can to protect themselves. They'll sell. Certainly not all the Big Longs and not necessarily all their shares, but a goodly proportion. One hell of a bunch of shares.
Institutions are notorious for follow-the-leader panic selling when things turn sour. Initially they may feed maybe a daily half to a million shares into the market, banking on the restraint of their fellow Bigs and hoping for an orderly liquidation. But this could break down and a real blood bath ensue, particularly if a bombshell should hit. Wouldn't be surprised to see one or more down days of 3 maybe 6 points, conceivably into the 20's. The problem always is: Sell, to whom?
... To the Big Shorts, who will be covering?
Yes, at some point, to some extent. But the idea of a short squeeze has pretty well evaporated with recent events. The Big Shorts know they are now in the driver's seat. And so the Longs will reason.
... pretty grim.
Of course there are alternative ways to liquidate big block shares in times of market difficulty. There are hedging stategies, and ways in which sales are not reported and which may already be underway. Nowhere is it written that sales between non-member individuals must be reported to the NYSE. Lord knows what is possible in the offshore Caymans-Lichtenstein scheme of things.
... You're not wandering off into Conspiracy Theory ar you?
No, just suggesting that in times of stress, more goes on than meets the public eye. The 3Q Institutional Holdings report will be out next month. It will be interesting to see what the holdings are relative to the last reported 62% and what shifts there may be among individual institutions. And the Short Interest report is due momentarily.
... you losing any sleep over this?
No, and I'm not all that certain things will work out exactly as suggested. As indiated earlier, I'm pretty confident of where we're headed but am happy to leave the how and when to the short termers and the day traders.
... Of course this Journal report could just be an isolated thing and everything will just blow over?
Of course. .... if the thought would give you pleasure.
... in a fit of contrition...
You lied, didn't you? That Baron was fined $1+ million by the SEC for stock manipulation.
... yes. The fine was actually $2,700.000 -- $2,000,000 for Baron Capital, the firm, $500,000 for Ron Baron personally, and $125,000 and $75,000 respectively for two of his traders. Not contested. Levied earlier this year.
Heavy bread. What was the crime?
... as I say, stock manipulation. Not contested. Ron Baron himself, founder of Baron Capital and manager of the Bamco fund, "ordered his traders to engage in illegality."
... Sounds ticky-tack.
Yes, if you call $2,700,000 a mere nothing, taken in the scheme of things. Wall Street and Boca Raton and all.
... Why Boca Raton and what's Baron Capital got to do with KKD?
Boca is widely credited as a World Class haven for the financially "nimble." Polite word. That's where Baron is headquartered. Baron Capital runs Bamco, the second largest holder of KKD at last report with over 400,000 shares worth some $200,000,000.
Just sheding some light on who the Big Longs might be, perhaps to explain some of the trading over recent weeks. 400,000 shares is a lot of shares to move when a market starts falling apart.
... you don't think Bamco is in for the Long Haul?
Not likely, that's not their nature.
... which is?
... reflecting on Hyperbole and the days ahead...
One thing that KKD has done extremely well is to hype itself, both the product and the stock. With great success. Their 10-K brags of 10,000 print mentions in 2002 -- The WSJ, NY Times, LA Times, etc. -- 100's of TV mentions -- The Today Show, Jay Leno, NYPD Blue, etc. -- "placements" in 225 movies and TV shows. The organized Store Opening frenzies. The donut and the stock on every lip.
Tremendous hype, highly effective on the way up. But this could turn to savage KKD on the way down.
Will Milberg Weis take on a Class Action suit? Maybe, KKD has deep pockets and M-W might see the publicity value, money and legal basis perhaps secondary. More likely that a Big Short would hire his own attorney and file, for his own purpose. Dirty pool but the way the game is played and likely to attract huge press coverage.
Would the SEC be interested? Not likely. KKD a well known target and great publicity, but other fish to fry.
Worth the attention of an Investigative Reporter out to make his mark? You bet. KKD a highly visible target. Not just financial news but Front Page news --- "Wall Street Darling Stubs its Toe", "Another Enron Surfaces in Carolina." A once adoring public would eat it up. Everyone likes to watch a train wreck -- Martha Stewart.
"The Enquirer Wants to Know."
Damaging to the stock. Damaging to the brand. High vulnerability. And so Big Longs might reason.
-- Why aren't financial analysts on to this??
Who says they aren't? Great value in reporting privately to Big Longs and giving them time in which to manoeuver, but value destroyed if prematurely released to the general public.
Option expiration tomorrow. Interesting to track the close.
Wow. This is a fascinating chat board. This is one of the rare ones -- where the rational people are the shorts.
Your comment about the run up from 30 to 50 and sliding back to the 40's is completely right, except you say that "the fundamentals couldn't be any stronger"!!! Considering a rational discounted future cash flow analysis of KKD gives a stock value of $10 a share -- maybe $15 if you really believe Iraqis will love doughnuts someday -- I kind of choke when you mention fundamentals and think it supports these prices. At these prices, KKD is better than "ZZZZ Best", but the only thing supporting your "buy" is a PT Barnum effect. No telling how long it will last -- it could last quite a while if the company avoids stupid mistakes -- but beware, at the first goof, Wall Street will punish these bozos. Sadly, probably even more than what they really deserve, but that's the price for soaking up too much sunshine.
The most recent earnings report should concern you, because unless I am mistaken, management appears to be starting to "manage" the earnings -- which is always the first step when they see the handwriting on the wall but don't want to read it.
Now, the good news: management may be smart enough to keep this puppy going sufficient to support a $40 stock price ten years from now. So consider, this $43 stock may hang right around $40 for ten years. The shorts won't win, but I have to laugh at the stellar returns the shareholders won't be getting.