What are the fellow longs expecting to be the loss for FY2006? I'm thinking it's going to be about $25M. Hopefully, this will be the last year we see a loss. I think there is a good chance we end up making 10 cents or more a share for FY2007. It sure would help if Brewster would give a hint as to when he expects profitability to return. My guess is maybe next quarter; If not, 3Q (after we are done paying all of the extra accountants).
Such as Morgan Stanley and Goldman Sachs are not to be readily dismissed.
In finance, never underrate your adversary, nor overrate his rectitude. Focus less on his intentions, more on his capabilities.
"A second answer suggests that The Market is simply inept, that it is unaware of, or disregards, the obvious fundamentals and is trading on technicals, day trading, bottom fishing, momentum, short covering, and such. Possible, of course, but there are too many heavy hitter knowledgable professionals..."
...yeah, like the ones who owned Enron? Give me a break, the big investors can make big mistakes.
What's REALLY going on?
I have the following on reliable authority:
About 3 months into his tenure @ KKD, Mr. Cooper became alarmed about the accuracy and detail of the accounts appearing on this board about the true financial state of his company. At first he was convinced that one of his young leuitenant's from Kroll was feeding raw data to the shorts (especially di_vur_se_fi) but the young man soon persuaded his boss that this board was unlike most others and that the shorts here had been doing their accurate analyses long before Kroll got involved with KKD. This, however, only infuriated Mr. Cooper further, and he ordered (in the course of a shouting match) that Mr. Panagas put an end to all this nonsense. Rumor has it that Mr. Panagas tried to get internet company hosting this board to pull it. He failed and, finally, he found two individuals on this board who were willing to act as advocates -- in exchange for certain considerations -- for KKD, and respond to any and ALL posts by those belonging to a blacklist, whose members are distinguished by their 'short' outlooks expressed on this board. These two have been playing a variation on the good-cop-bad-cop routine here, one more aptly described as 'bad-cop-worse-cop'.
[I thought I woould divulge this for the benefit of those who are wondering how someone could be -- even annonymously -- so mindlessly banal for so long for no apparent reason.]
Digenetic?....conspiracy??? Impossible...he would never stoop to such lows. But wait...isn't he the muse wannabe who used to post what he considered cute, flowery soliloquies speaking of all kinds of KKD conspriracies???
Wachovia + BB&T + KKD + the "$25 million dollar woman"?
Conspiracy involving all KKD execs and anybody else even remotely associated with KKD, past or present, all of whom he claims WILL be indicted as soon as "justice is served"???
KKD conspiracy to poison all children in California thru a donut of the week club???
Yes, that's the muse wannabe....I guess when you and your daughter are shills for Winchells Donuts, you need to start somewhere.
I will add to this an educated guesswork theory:
many hedge funds probably initially look at stocks via custom made stock screens, whether for technical or fundamental trading/investing. They have a variable 0 or 1 for "financials exist".
So if (financials exist == false)
Skip this stock;
that kind of thing. So I think this leaves any valuation-based mass-hedge-fund trading of KKD in the dust, and I'm thinking that when they become totally current (i.e. not only FY2006 but also Q1FY2007) then hedge funds will look at say "oh my? EV/EBITDA of 30-40?" and sell the stock. that's what i'm hoping for.
also there has been a small cap rally and to an extent this has been reversed in May, and has further to go.
You ask: >>How do you explain that when the FY2005 numbers were released, the stock rallied? Even I can see that the numbers reported were very bad.<<
Reasonable question. More broadley, how do shorts explain the continued trading of KKD above any price justified by the fundamentals?
One answer suggests that somehow The Market knows something this board doesn't know. Yet, commonly known information tends to come out, and it hasn't, not over the past year or so.
A second answer suggests that The Market is simply inept, that it is unaware of, or disregards, the obvious fundamentals and is trading on technicals, day trading, bottom fishing, momentum, short covering, and such. Possible, of course, but there are too many heavy hitter knowledgable professionals, they who move markets, who are reportedly long which discourages this logic. Albeit it is possible the big long positions are hedged or innacurately reported.
A third answer lies in the area of conspiracy, that is that Silver Point and selected close associates are utilizing their inside knowledge of Krispy's operating results, cash, and cash flow to play the share and option market, play it like a banjo, trading in and out, uilizing various option grants (the McAleer collar and the "success fee" in particular) while in the meantime SP is collecting its interest and Cooper and Weil Gotshal their fees. This would involve illegalities and risks of course but such are not unknown in the financial community.
Myself, I find the first two answers difficult to accept, and thus in the absence of any other, tend toward the third.
I was just checking the loan papers. I was looking for the cash and debt amounts that KKD started with when they got the new loan, but couldn't find them.
Anyhow, I confirmed the capex expenditure limit of $15mm, but the interesting thing is that this is increased to $30m in FY2009 and then $50mm the following year. So it seems to me the idea is "stabilize first, and evolve and grow later". Clearly, we are in the "stabilize" part for now.