Hole-y Cow, Krispy Kreme Is Going Public Again

I had to try and wake myself up for fear that I was dreaming, but it was no dream. Krispy Kreme is indeed going public again.

The iconic doughnut company was acquired by JAB Holding in 2016 for a measly $1.35 billion, or $21 a share, a price that still makes my blood boil (just a little). Krispy Kreme had been one of my down-and-out reclamation projects, a former cult stock that nearly went bust. When I stumbled onto it, Krispy Kreme was long past its initial IPO, had made it through some rough times, including over-expansion and accounting issues, and had become an afterthought to most investors, including me. But Krispy Kreme had cleaned up its act and very quietly had become a solid bargain, one that was nearly debt-free while owning substantial real estate.

Krispy Kreme, which acquired a majority stake in Insomnia Cookies in 2018, did $1.12 billion in revenue in 2020 but lost $64 million. One thing JAB did since acquiring Krispy Kreme was to load it up with debt, to the tune of $1.21 billion as of April 4, 2021. At least some proceeds of the offering will be used to pay down debt. I can't wait to see how this one plays out; how cute that the new ticker symbol will be DNUT.

Speaking of former publicly traded companies re-entering the public markets, Mudrick Capital (MUDS) , which is taking Topps (of baseball card fame) public again, got spanked Tuesday, down 15%. I'll spare you the reasons for the sell-off, as Tim Collins covered it well on Tuesday afternoon. I, for one, remain excited about a Topps initial public offering, and yes, part of that is for nostalgia's sake. Incidentally, nostalgia and investing can be a dangerous combination.

At the time of publication, Heller was long MUDS.