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Krispy Kreme Doughnuts, Inc. Message Board

  • undervalued_investments undervalued_investments Jul 25, 2007 5:38 PM Flag

    Buy when everybody hates the stock!

    But with KKD, we are not there yet.

    I would love to know what the sheik is thinking! It is reasonable to think that he is NOT thinking about losing money on this deal.

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    • The sheik is thinking of some of his other investments... you know... not the ones that are 1% of his net worth. And i also bet he's thinking that Ahmed Samy or whoever the trader, is a retard.

      In my opinion this is "it". I am willing to bet that there's better than 50/50 chance that KKD stock will never again trade above $8. At over 25x declining EBITDA this is still crazy expensive.

      And if you look at what's going on in credit markets over the past 6 weeks, there's a good chance that next time KKD violates covenants (and they are experts at doing that) the lenders will hike the interest rate.

      • 1 Reply to meme4564564
      • >>The sheik is thinking of some of his other investments... you know... not the ones that are 1% of his net worth. And i also bet he's thinking that Ahmed Samy or whoever the trader, is a retard.<<

        It seems to me this may be a bit different from his "average" investment. He now has stores that sell the product, he can see it and taste it. There's a good chance that him or whoever bought the stock had a chance to talk to his people in the stores, assess the potential, etc. etc.

        >>In my opinion this is "it". I am willing to bet that there's better than 50/50 chance that KKD stock will never again trade above $8. At over 25x declining EBITDA this is still crazy expensive. <<

        OK, I'll bite. How much are you willing to bet? How long is "never"? You guys have been wrong so many times, I don't think there is much chance this time you will be right.

        Haven't you (short) guys not learnt anything in the past 3-5 years? If it wasn't the sheik this time, some other high-profile organization would own the stock. Don't you guys get it? This company is not destined to fail. At least not anytime soon.

        >>And if you look at what's going on in credit markets over the past 6 weeks, there's a good chance that next time KKD violates covenants (and they are experts at doing that) the lenders will hike the interest rate. <<

        The current situation with the credit markets did not start last week or last month. Why didn't they hike the interest rate this past time? I am sure the lenders want to work with KKD.

 
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