I just shorted 3500 shares of KKD at the open at $3.30. This stock looks like it wants to retrace to the 50DMA before earnings are announced on 4/17. I am hoping it will collapse faster than the coronary arteries of the fat slobs who salivate when the "hot" sign is lit-up out front.
I like this quote from a New York Times article. It is from a resident that lives next to a KK: "It's the smell of oil, grease and sugar,'' she said. ''I took a bite out of a Krispy Kreme and spit it out, it was so horrible, like a sponge dipped in grease.''
scott- not a bad bet on KKD. Especially in light of the recent anouncement about the co asking its lenders to relax loan covenants. My guess is that the lenders won't approve the requests and KKD will be forced to sell more asset to "cover the margin call" in order to comply with the covenants. In a diferent time KKD could shop for better term with other lenders but in today climate it's very difficult. Watch for the last mixing facility in NC to be sold off next.
I had someone else tell me the exact same thing once when I was shorting GSX. Yes, you most certainly can short stocks under $5. My account is with Fidelity, but maybe other brokerage firms have different restrictions.
Well, my friend that's a bold move. Considering a long's downside potential is only $3.30 at this point, your risk however is infinite! You could be looking at a 15% to 20% loss in a very short period of time.
I have no postion in KKD but I've watched people bash it for 4 long years suggesting bankruptcy, SEC investigations, shareholder lawsuits, etc.
I understand the risks associated with shorting, which is why I generally never hold a short position through earnings. However, note in my post that there was no bashing per se. I made a full disclosure of my position, and did not try to suggest any unfounded rumors.