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.
>>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 ...<<
Me? That's the point where I gritted my teeth and sold out some other long positions to lock down my jaws on this POS like a pit bull in attack mode. Had already lost money on short-term puts on that run-up (not to mention my overall short position) so it p*ssed me off and just made me buy more puts. What I learned is that even the best shorts are too weak in general. I learned to be a strong short on this piece of crap. I learned that big players play the short-term traaders and that that process can keep a shell floating for longer than you would ever imagine!
Lets assume the $250m writeoff which as you say indicates they have not earned anything on a real economic basis for years. As the most recent BV is $6.65 that means they would be writing off about 60% of net equity at a time when they are bumped up against lending requirements and need more cash desperately to help finance the expansion of 77 more units which I suppose will be mostly owned and JV's, as most franchisees seem tapped out or unwilling to expand further. Also the capitalized liability for their many leases has not been factored into the lending equations. Even the limited loan criteria at Wachovia would speak against such a large writeoff, I suspect. So you say no problem ,they can have a stock offering of 6,000,000 shares which would net the company about $220,000,000 at best. ( as stock would sell off)
. Theres the rub. First they would need a new Prospectus which would give much insight to their funny accounting games. That and the dilution ( taking earnings back close to $1.00) would help bury the stock. But further if they took the massive writeoff within 18 mos of such an offering they would open themselves to many lawsuits. I suspect they will try to issue stock to some of the franchisees with preclosing massive writedowns and super high Goodwill to keep the machine rolling, but they risk a decent journalist or regulatory body in the interim. They need some luck as they are running low on options. You say borrow more on the already shaky balance sheet. ? I think it strains credulity but the bankers have been had before. Eventually " smoke and mirrors" promos come to their proper fate. Tic,tic,tic.........
Responding, along with your alter ego, to your own post....classic...now there are four of you.
"What's the probability?
... Call it 50/50. There's also a 50/50 chance that management would use such a
write-off in exactly the opposite way, forget the spin and knock the stock down onto its
knees, to $10 or so."
Again, you're too kind.
If you going to attack KKD, why be so generous in your accusation?
If your going to sling bullshit, why not make a large cow patty?
... continuing on ....
You say there is a Dark Side for we Shorts in this matter of accounting?
... Yes, to date I've been imagining largely how the Big Longs and the Big Shorts might think. Overlooking how KKD management might think and underestimating management's ingenuity and imagination.
Which leads you where?
... Basically, KKD shows signs of having pretty much pushed the accounting envelope as far as it can go, barring SEC and Accounting sanctions .... Enron, the handcuff's and all. KKD's quarterly statements are unaudited but the 1/31/04 year end is approaching where Price Waterhouse will be taking a close look, mindful of where Arthur Anderson is today.
.... So it may be time to take a write-off, a humongous write-off.. Bite the bullet. Reverse and correct the accounting liberties, write off the intangibles at one fell swoop, write off bad receivables and inventory, accelerate depreciation, expense the stock options.
.... Beyond that, set up reserves for everything imaginable as far as P/W will permit, to be reversed later as 'profit.' (Will the cooking never cease?)
That would add up to quite a bit.
.... Yes. Maybe $250,000,000.
Good golly, that's twice KKD's retained profit to date. That'd amount to confessing that KKD never has earned a penny from the beginning. That'd knock shareholder equity down to just a couple of bucks. That would seem a Bright Side for we Shorts, not a Dark one.
... Not necessarily. Don't undersestimate the imagination of the Hype-Meisters, and don't overestimate the intelligence of the investing public. What if KKD were to announce record earnings for full year 2003, pro forma of course, net of adjustments, and raise the guidance for the coming year; dismissing the write-off as merely a one-time event to rationalize the books and present a more open and understandable picture to its shareholders. After all, $250,000,000 would only amount to $4 a share, a nothing for a $40 stock heading to $70.
Would the bankers and the analysts buy this?
... A problem. Stranger things have happened.
What's the probability?
... Call it 50/50. There's also a 50/50 chance that management would use such a write-off in exactly the opposite way, forget the spin and knock the stock down onto its knees, to $10 or so.
Why would management do that? What's the rationale?
... Not now, later.
What's with these 50/50 predictions?
... The beauty of 50/50, of course, is that if it happens you predicted it. If it doesn't, you weren't wrong.
Still at it aren't we? Wise guy.
The frigging IDIOT X59 has to be a paid Basher/pumper to be on here all the time with total nonsense. What a piece of trash. He ought to shack up with Citation who also has less than nothing to offer. Their coache's instructions are to take out the defensive end Diverefi and the Fullback Generic with whatever means you can. Feels and looks like a Goalline stand as the stock is starting to crater under the weight of facts. This is a fad who's time is running out fast. Tic,tic,tic.........
"If you keep this up, I think I'll have to start referring to you as spermhead."
Still have that infatuation with sperm, huh?
What does your "partner" have to say about all of this?
Is he jealous?
Or is your hand jealous?
Which is it?
You never elabortated.
I can see why?
I guess the word "woman" doesn't belong in youir discussions of "getting laid," does it?
Sorry Monty, sweetheart, but I can't quite march to your drumbeat, as much as you try to convince me that hand jobs and/or male partners should be the persuasion of choisce?
Do you really think the KKD chat board is the proper forum to discuss your perverted lifestyle?
Why don't you back to other alias claiming that you found a pubic hair in your donut.
x59, there goes another 45 wasted minutes of your life that could have been used for more productive purposes, like getting laid (or due to your antisocial behavior, at least a good hand job.) Give it a break already. If you keep this up, I think I'll have to start referring to you as spermhead.
To diogenes1234 and his/her alter ego:
Di_vur_se_fi was (and still is) trying his best to paint a picture of CRIMINAL activity.
Desparation or whatever personal resentment he has towards KKD is obviously taken their toll.
His latest inkling was that of a book "after it's all over."
You tell me.
"rather than the spirit of truthfully revealing circumstances on a fair,
consistant, and understandable basis."
And please name a corporation or two that does THAT.
" ... a case in point?
Take that Harrod's opening. $160,000 to a PR agency alone. Plus travel and living
expenses for Winston Salem biggies, shipping equipment and supplies to London,
setting up the equipment perhaps at a second site in advance, those 240,000 freebie
doughnuts, inducements to Harrod's for the space, a year's supply of HOG's to the first
in line, $100 to charities for the next 200 (or 2,000 seeing its London and all?) Added
up, a pretty penny. And how will it be accounted for on KKD's books?
... make your point."
"The freebies -- booked at retail and taken as expense?
Which expenses charged to the franchisee and which to KKD?
In what period were the various expenses charged? 2Q or 3Q?
At what exchange rate were British pounds converted to USD?
Importantly, were some or all expenditures capitalized as pre-opening costs and not
And if capitalized, are such expenses being written off? Over what period? Or not all?
Possibly capitalized in one period and reversed in a second, or vice versa?....
You get the point?"
Is this illegal?
Is this not being practiced legitimately worldwide by other corporations?
You get the point?
" ... our friend X- What's-His-Face is going to scream for documentation, he's been
ranting at diversufi on this for months."
Nope, no documentation requested.
Just trying to make sure you "get the point," Mr. schizophrenia-with-an-identity-crisis.
You get the point?
"Let him scream. The poor sap has got to understand we're not conducting a criminal
Maybe you're not, but di_vur_se_fi is.
Check the archives.
"looking for a 12 - 0 jury vote beyond reasonable doubt. We're voting with our
investment dollars. The mere sniff of skullduggery is enough to sell; for the
adventurous, enough to short."
You are too knid.
I think it's a bit more than that.
The stench of desparate "revenge" is rampant.
" ... aren't you carrying this to a bit of an extreme?"
Aren't you (that is addressed to you and/or your alter ego)?
Especially the scizophrenia?
"Ben Graham's skepticizm is good enough for me."
Well, if you must depend on other's judgements, by all means...
KKD is extraordinarily promotional in everything it does, the opportunity to distort is
there, and the incentive is tremendous -- personal and corporate."
You're not too familiar with corporate enterprise, are you?
"Not now, later. To be continued..."
Who are talking to?
Please spare us the pain of figuring that out.
Lastly, what do you feel is accomplished on a KKD chat board by all the conjecture, innuendo, and otherwise BS that is never, ever substantiated by reality?
Do you REALLY think you are going to make a difference in how people invest in KKD, or does it simply seem nice to see your conversations with yourself up there on the screen?