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Krispy Kreme Doughnuts, Inc. Message Board

  • undervalued_investments undervalued_investments Sep 9, 2006 1:07 PM Flag

    The worst is over for KKD!!

    Almost all lawsuits behind, the worst months of the year behind, and a new era of international expansion about to shine!!

    The 10-Q next week should be very telling. If cash is stabile or has gone up, watch out! I wouldn't be surprised to see several positive announcements next week. It's like Brewster wants to line all of his ducks in a row before a big launch. Seems to me he has to break the silence soon.

    Cooper has overhauled the hull, and pumped most of the water out. Now it's time to cruise at maximum speed!

    Go KKD!

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    • well, we do know that there are operating profits at some stores, plus international franchisees. so there should be some sort of re-emergence from ch11, even as a tiny company earning 5mm per year. but eventually the earth will get burned by the sun and everyone will go ch.7. IBM, GOOG, MSFT, JNJ, KKD....

    • You wrote:No one predicted ch.7 we are predicting ch.11. Put me down for 7. If La Habra doesn't pass the bank's smell test after 7 years, this Dog don't hunt. Chop it up and pass it around. Kind of reminds me of an old John Prine tune.

    • Valuation will eventually assert itself, that's another thing.
      ========================

      Maybe. Even so, what opportunities will you miss in the meantime ignoring what the market is saying via price action?

    • <<Who is talking about precise predictions. Just answer this, when you started your short position on KKD, if I had told you that KKD would be alive and well in September 2006, would you have believed me?
      What do you think if I tell you KKD will be alive and well in September 2007, or September 2008??>>

      define 'alive'? no one, not even di_vur ever predicted that KKd will have 0 stores left. No one predicted ch.7 we are predicting ch.11. You still don't get it...

      When companies file ch.11 they STAY alive. However their capital structure change and the various parties switch around their roles and often shareholders are TOLD by a JUDGE that they will be left with nothing. Often Counsel tells the company to issue a Pr that says the common may be worthless.

      <<especially since things look stable now?>>

      Is not DIPing rigel a sign of stability?
      Is questionable GCFF payment a sign of stability?
      Is continuous outflow of royalty stable?
      Are franchisee closures stabilising? no they are accelerating.

      Anyway, read my post on chapter 11. I am trying to make you understand what's the prediction here. Valuation will eventually assert itself, that's another thing.

    • "Just answer this, when you started your short position on KKD, if I had told you that KKD would be alive and well in September 2006, would you have believed me? What do you think if I tell you KKD will be alive and well in September 2007, or September 2008??" ------- Very well said!

      "I almost pulled the trigger this morning! If she had crossed $8.20, I probably would have. Anyway, the action today does not look well for shorts. She closed up on higher volume." ------- Agreed. And, IMO, KKD could be at $25 by 2008. Good luck with your trade!

    • ><<Cooper is considered to be among the best!>>

      >best in what? doughtnuts? food service? retail? wholesale? >manufacturing? real estate? No, no, no, no, no, no and no. >Cooper is the best at LEGAL ISSUES and CAPITAL STRUCTURE. >Protecting BODs, protecting lenders, stabilizing cash ?>flow, simplifying situations, finding solutions, playing >hard ball to get the job done.

      Thank you!

      >I agree with you that cooper is good and succeeded at >doing these things, but the donut business was left behind.

      That is why they brought in Brewster. Thank you!

      ><<WELL BEYOND of what you shorts thought could be possible!>>

      >we rarely predicted timing, don't put words in our mouths. >i did once but di_vur, Vulture, pers, mungerian never >really did.

      Who is talking about precise predictions. Just answer this, when you started your short position on KKD, if I had told you that KKD would be alive and well in September 2006, would you have believed me?
      What do you think if I tell you KKD will be alive and well in September 2007, or September 2008??

      ><<They have had plenty of opportunities to call in the >loan, and they haven't.>>
      >sept 10th, 2001: terrorists never attacked us in the US >therefore they never will - right?

      Why would they do that now, specially since things look stable now?

      ><<and what did the stock do? Rally big time!!>>
      >what are you TALKING about? the stock rallied because of >Al-Kharafi.

      That is not what I recall. Look at the chart, the stock dipped for a short time to $8, and then it rocketed to almost $12.

      >Ok well it was nice talking to you again, but you got me >really tired responding toall this. For your own good,

      Nobody is forcing you.

      >please respond to the folowing question: what is your >valuation of krispy kreme's assets, before taxes & >interest?

      If you are talking about stock price, sure, a rational valuation would probably put the stock price well below $8. But that is irrelevant right now! The expectation is that it will go much higher due to the international expansion. You can complain all you want that the stock is not valued as it should, but that is irrelevant. What counts is where the stock will go next.

      I almost pulled the trigger this morning! If she had crossed $8.20, I probably would have. Anyway, the action today does not look well for shorts. She closed up on higher volume.

    • <<Dunno. Why did Brewster accepted the top job if he has little control as you imply?>>

      Why did all kinds of managers at Kraft leave, and then also the CEO?

      <<,I find that EXTREMELLY hard to believe!>>

      blogger told us this story, he was on the BOD of KremeKo so he knows.

      <<Cooper is considered to be among the best!>>

      best in what? doughtnuts? food service? retail? wholesale? manufacturing? real estate? No, no, no, no, no, no and no. Cooper is the best at LEGAL ISSUES and CAPITAL STRUCTURE. Protecting BODs, protecting lenders, stabilizing cash flow, simplifying situations, finding solutions, playing hard ball to get the job done.

      I agree with you that cooper is good and succeeded at doing these things, but the donut business was left behind.

      <<WELL BEYOND of what you shorts thought could be possible!>>

      we rarely predicted timing, don't put words in our mouths. i did once but di_vur, Vulture, pers, mungerian never really did.

      <<They have had plenty of opportunities to call in the loan, and they haven't.>>

      sept 10th, 2001: terrorists never attacked us in the US therefore they never will - right?

      <<It was pretty bad (I concede this)>>

      not to me, i expected all the write-offs and everything else. i guess when u predict things in advance u don't get surprised...

      <<and what did the stock do? Rally big time!!>>

      what are you TALKING about? the stock rallied because of Al-Kharafi.

      Ok well it was nice talking to you again, but you got me really tired responding toall this. For your own good, please respond to the folowing question: what is your valuation of krispy kreme's assets, before taxes & interest?

    • >ignore legal sensitivity at your peril. SC told BOD to step down MORE than a year ago. why are they still there?

      Dunno. Why did Brewster accepted the top job if he has little control as you imply?

      >plan was to shield BOD from liability, resolve lawsuits. The way this was implemented was securing SP loan to buy time to do those things. In order to keep support, cash flow needed to be stopped, so KZC did that too.

      SP got there to make money, period. I read somewhere there was good competition to get KKD's business, and SP won.

      >rephrasing: the fact that cooper listened to those morons shows you what judgement he has. P.S. let me repeat. In the KRemeKo BK, cooper thought he can resell the franchise witout financial statments. No only does that show he has no clue, but it also shows that all the top management at KKD had no clue. and remember that Livengood was still working as consultant at that time. So Livengood and the McAleers also had no clue. These people HAVE NO KLUE. period.

      I find that EXTREMELLY hard to believe! Cooper is considered to be among the best! I can't believe he has "no clue" as you mention. For one thing, he has kept this company alive WELL BEYOND of what you shorts thought could be possible!

      >huh? you are reversing my logic on me? Lenders do not callin loans for EBITDA violations alone. However, they DO react to them: mass-closures, higher interest, paydowns, limits on usable cash. all that were punishements. Study loans.

      They have had plenty of opportunities to call in the loan, and they haven't. So I think they think they will be paid and they are NOT thinking they will lose money on this one.

      >ok that's actually a good point, although i don'tknow how likely it is that that are playing such a game. Usually when you pretend that you are weak it's a self-fulfilling prophesy. You become weak. For example: you pretend to be weak, sosomeone says: ok KKD is desperate and he has to leverage against me so Iwill do X. And then you do X and either you getaway with it, or they show their cards and hit you back. And if they do show their cards, theyare right back where they started. See what I mean? Besides, if KKD wanted to pretend to be weak, they would not have issued PRs for international franchising with this amazing excitment and Brewster would not go yell like a happy kid with all the newspapers. So I think that there's more incentives to pretend things are good, then to pretend things are bad,if anything. but this is actually an interesting issue.

      $19M for now seems to be plenty, specially that it appears they have cut the bleeding.

      >well i hope for you that you wait post-monday night, maybe it'll be cheaper then, maybe not.
      I'm tempted to buy tomorrow, but obviously I will wait until tuesday and make a decision then.

      >well!! If you expect financial statements, then all the above is irrelevant, because this will make our short case. The market will see how EBITDA sucked during FY2006 and especially how it sucks in Q1&Q2 FY2007. The big shareholders will sell. EBITDA is probably going towards 20mm annualized for FY2007 (net income negative of course). at a generous 10x EBITDA, we're talking 200mm, 150mm for SP, and 50mm for shareholders. i.e. $1 per share

      What happened with the FY2005 report?? It was pretty bad (I concede this), and what did the stock do? Rally big time!! Why would it go down this time?? I think you'll all be surprised to see the report won't be anywhere as bad as you guys think. Remember, super-Cooper is in charge.

    • <<Except the stock price AND the fact the company has not gone BK (and probably won't)>>

      ignore legal sensitivity at your peril. SC told BOD to step down MORE than a year ago. why are they still there?

      <<Plan has been to keep the company out of BK and grow it internationally.>>

      plan was to shield BOD from liability, resolve lawsuits. The way this was implemented was securing SP loan to buy time to do those things. In order to keep support, cash flow needed to be stopped, so KZC did that too.

      <<prediction that Cooper/KZC has no clue - 6 fired officers
      Wasn't that the Special Committee?>>

      rephrasing: the fact that cooper listened to those morons shows you what judgement he has. P.S. let me repeat. In the KRemeKo BK, cooper thought he can resell the franchise witout financial statments. No only does that show he has no clue, but it also shows that all the top management at KKD had no clue. and remember that Livengood was still working as consultant at that time. So Livengood and the McAleers also had no clue. These people HAVE NO KLUE. period.

      <<OK, once maybe, that's about it. Have they violated this recently? And yet, the lender has not pulled the loan!! What do they see you don't?>>

      huh? you are reversing my logic on me? Lenders do not callin loans for EBITDA violations alone. However, they DO react to them: mass-closures, higher interest, paydowns, limits on usable cash. all that were punishements. Study loans.

      <<Again, this may have been part of the plan in order not to tempt SEC and others to attack the cash.>>

      ok that's actually a good point, although i don'tknow how likely it is that that are playing such a game. Usually when you pretend that you are weak it's a self-fulfilling prophesy. You become weak. For example: you pretend to be weak, sosomeone says: ok KKD is desperate and he has to leverage against me so Iwill do X. And then you do X and either you getaway with it, or they show their cards and hit you back. And if they do show their cards, theyare right back where they started. See what I mean? Besides, if KKD wanted to pretend to be weak, they would not have issued PRs for international franchising with this amazing excitment and Brewster would not go yell like a happy kid with all the newspapers. So I think that there's more incentives to pretend things are good, then to pretend things are bad,if anything. but this is actually an interesting issue.

      <<Moi? Why? FYI, I am not even long right now (hopefully soon)>>

      well i hope for you that you wait post-monday night, maybe it'll be cheaper then, maybe not.

      <<That will be fixed shortly, hopefully by end of October the latest.>>

      well!! If you expect financial statements, then all the above is irrelevant, because this will make our short case. The market will see how EBITDA sucked during FY2006 and especially how it sucks in Q1&Q2 FY2007. The big shareholders will sell. EBITDA is probably going towards 20mm annualized for FY2007 (net income negative of course). at a generous 10x EBITDA, we're talking 200mm, 150mm for SP, and 50mm for shareholders. i.e. $1 per share

    • >WRONG. In most states of the union UFOCs cannot be issued if a franchisor is not current on their financials. As long as there are no financials.

      That will be fixed shortly, hopefully by end of October the latest.

      >di_vur, PHVulture, Perspicuator, and a few others, including sometimes myself, have been right about almost everything except the stock price.

      Except the stock price AND the fact the company has not gone BK (and probably won't).
      Look, the company was in bad shape last year and in 2004, but hopefully Cooper has now put in place strong columns that will support this company going forward.

      >- prediction that Cooper/KZC has no plan - obvious

      Plan has been to keep the company out of BK and grow it internationally.

      >- prediction that Cooper/KZC has no clue - 6 fired officers

      Wasn't that the Special Committee?

      >- prediction of CEBITDA violations - bull's eye

      OK, once maybe, that's about it. Have they violated this recently? And yet, the lender has not pulled the loan!! What do they see you don't?

      >- prediction of 1st lien facility being pulled away

      Again, this may have been part of the plan in order not to tempt SEC and others to attack the cash.

      >- prediction that Brewster has no clue

      How do you really know? At least he has kept the stock price higher than when he came in.

      >Need I go on? You need a little lesson in humility

      Moi? Why? FYI, I am not even long right now (hopefully soon).

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