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Krispy Kreme Doughnuts, Inc. Message Board

  • legofthebear legofthebear Jul 18, 2000 3:25 PM Flag

    Classic short squeeze here!

    Livengood probably buying up shares for a
    squeeze. Only 3M float, 1/3 short! He doesn't have to buy
    that many shares to pull it off becuase there are only
    2M shares available. Insider ownership 77%. I
    wouldn't short this puppy until insider % under 50 %. It
    could get very tough to find shares if he has the cash
    to keep it up. This stock is way over valued, but
    with only 3M shares outstanding Livengood has the
    leverage. IMHO - good luck shorts this stock needs to drop!

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    • board really needs an obnoxious long posting, so
      I feel that it's my duty. I don't want anyone to
      take it personally, but this incarnation of me has
      been frighteningly correct.

      Hmmmm, perhaps....
      nah.

    • now, don't you feel better?

    • eom

    • out my long position today @ $73. I'm not stupid.
      The person who keeps on claiming to feed the slop is
      Wavethreedown, not me. I do have an alter-ego on the board, but
      he's short and doesn't show up too much.

      Let's
      face it, anyone still long in this stock certainly
      doesn't own a computer, or if they do certainly doesn't
      have access to a phone that you don't have to wind up.

    • Didn't the cheerleading management say that their
      same store growth would be in the MID SINGLE DIGITS?

      And didn't they say that the IPO effects were going
      to be temporary?

      I guess all is forgotten,
      since the stock is creeping back up, but what is not
      forgotten is that the fundamentals remain awful for a
      company with a triple digit P/E and weak SS
      growth.

      The longs are playing with fire, all of you think
      that you can be the last one out at the top but the
      odds are highly improbably that you'll get out with a
      gain. A bunch of bag holders jetting for the exits
      before October. IT IS GOING TO GET UGLY.

    • Shares that can be borrowed for shorting come
      from longs holding in margin accounts and
      institutional owners the lend their shares out. As the
      institutions sell that could decrease the short shares
      available. A true short squeeze occurs when the person
      whoose shares your broker borrows to sell short to you
      sells and your broker can not find replacement shares.
      At that point your broker can force you to buy even
      if you have equity to cover the short position.
      Needless to say, the can really piss a customer off so the
      brokers carefully limit the amount of short shares they
      sell so that they will hopefully never have to make
      that call. I am unaware of any real time reporting
      source on the web for short interest.

    • For what is worth, according to yahoo there was a
      decrease in the number of shares short (from 1.01M in May
      to 993K in June). In the big scheme of things, this
      change was insignificant and is still about 1/3 of the
      float. I have also experienced first hand how difficult
      it is to get additional shares to short
      (Etrade).

      There are two things that I think would be very
      interesting to find out about KREM:
      1) Is there a
      resource on the net where I can see the day-to-day or
      week-to-week short interest on KREM? It would be very
      interesting to see what happened to the KREM short interest
      during the runups to 80+.
      2) Also, it would be very
      interesting to find out what the exact rules are to determine
      the total number of shares that can be shorted for
      KREM. Why only about 1/3 of the float? Are some shares
      being "retired" and can no longer be shorted? Is it
      possible that a large brokerage house can suddenly release
      a significant amount of shares that can be shorted,
      etc., etc.??

      Answers, anyone??

    • I would assume the short interest will always be
      around 1/3 of the float because that appears to be the
      number of shares available to be borrowed. I also do not
      think a short squeeze in the classic sense is possible
      here. Afterall, from what I can tell it has been
      incredibly difficult to borrow these shares for months now.
      While a few souls may get "squeezed" and closed out at
      a substantial loss, when they buy it frees up
      shares to be lent out and re-shorted. Therefore, any
      short covering will just be offset by additional
      shorting, this time by someone presumably better able to
      weather the storm. Afterall, someone who shorted in the
      $40's might give up by $80, but when those shares are
      re-shorted at $80 the new short should have additional
      wiggle room and a run to $100 should be able to be
      managed.

      At certain points even longs see the insanity and
      drive the stock down 20% over a day or two, as they
      have on a few occasions. We'll see what happens when
      it drops 50% in a few days and the margin calls are
      on the other foot. My guess is the daytraders with
      their casino mentality will not continue to play the
      game and move on to the next target.

    • Thanks for the reply. I agree that KREM is way
      overpriced. For anyone with staying power it is a great
      short.

      I do have the financial staying power but not the
      pyschological staying power. So I think that I'll just watch
      the show for a while.

    • I wouldn't call myself a convert.

      I agree
      that there is a possibility that it could go higher
      because of limited float, the hype, and the very, very
      high short position relative to the float. I also
      agree that it could go much lower because it is
      ridiculously overpriced based on all measures of
      value.

      I have no position in the stock because I think
      that it is a huge gamble either way.

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