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Krispy Kreme Doughnuts, Inc. Message Board

  • financeowl financeowl May 15, 2000 6:20 PM Flag

    Remember bagels and Boston Chicken?

    Remember what happened to Boston Chicken and
    those high flying bagel stocks of the mid 1990s? These
    are similar P/E levels. It's not sustainable. The
    doughnuts taste great, but the sky is not the limit. It's
    just a matter of time. Hopefully I will find a broker
    that will short for me.

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    • Look, Boston Market's P/E was around 300 when
      they did their IPO. The price topped out in the 40's.
      They then went back into the market and issued another
      $30 million worth of convertibles in less than a year
      after the IPO.

      Is the stock over valued, sure it
      is. I've taken down my position some over the last
      few weeks. And I have definitely not been averaging
      up since I bought in the mid-thirties. But please
      get your comparisons straight.

      Also, I can't
      believe people are still talking about the lockup ending
      in October. To me there are other great short
      prospects, Microstrategy dropped 2+ points in one day. That
      was a nice couple thousand. Why does anybody want to
      keep their money tied up until October. Certainly look
      forward to then. And how much do you shorts believe is
      going to be sold come Oct.? Lets see 12 million shares
      issued, 3 million in the market now. 9 million left. In
      order for the current family owners to keep control
      lets assume they need to retain 25% of the stock. That
      means 6 million more shares may enter the market. Lets
      assume that the price drops to $15 a share making some
      people VERY happy. If all of a sudden these insiders
      drop another 6 million into the market the stock price
      will drop, lets say to $10, making some people even
      happier. The insiders will lose around $30 million in
      stock value by doing this. I can't forsee anybody
      wanting to lose money. Sure a tidal wave of that guy sold
      and is driving the market down so I'd better get out
      now. But this is an old, respected Southern
      institution, and I really don't see any more than maybe 3
      million shares coming into the market in October.

    • I'm sure KREM will be in the crapper in two years, but short term wise (within two years) this will a good buy until they get over saturated which will be a long time comming.

 
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