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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Podsiadlik who wrote (89461)	1/20/2005 4:28:18 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 122087

Yes its amazing - I remember Tony saying each stock can ultimately hit zero. ... in October I had posted this fool article: Message 20667782 . Having in mind my "Bostq" guess too, I avoided kkd as part of my yearend buying efforts but that did little to improve the performance. I also remember a friend who lives over there saying couple years ago, the doughnuts are hot and it sounded like a fad...it was soo 1999 as they say. And now it is so 2001, with an election year passed and the chickens come home to roost. It is as if bad (earnings) news pop up left and right and people stop ignoring those news. On another note, i am watching the Charter endgame. It seems as if it is getting really distressed now, with the common stock having no residual value. That would be after 360network the second company where microsoft executives fail to deliver (when it comes to the shareholder value).

To: Kevin Podsiadlik who wrote (89461)	2/9/2005 6:17:30 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 122087

Cash crunch could fell Krispy Kreme Analysts wonder how company will overcome troubles By Jennifer Waters, MarketWatch CHICAGO (MarketWatch) - You could say Krispy Kreme Doughnuts Inc. is in a hot, glazed pickle. Shares of the troubled pastry maker crashed as much as 10 percent Wednesday, a day after the Winston-Salem, N.C., company conceded that a cash crunch was looming. At the close, Krispy Kreme shares were down 73 cents, or 9.1 percent, to $7.21. And to make matters worse, if lenders stick to their guns, Krispy Kreme has nowhere to turn for the money to carry it through. "Krispy Kreme cannot currently borrow money, which it needs to close stores," said Legg Mason analyst Glenn Guard, in a note to clients. In order to get lenders to hold off calling loans until March 25, Krispy Kreme (KKD: news, chart, profile) agreed last month not to take on any more debt. But in a press release Tuesday announcing $10.4 million in annual operating cuts, Krispy Kreme said a liquidity crisis was at bay. See full story. "Cash from operations continues to be impacted adversely" by sluggish sales and the "substantial costs and expenses" to cover legal, regulatory and restructuring issues, the press release said. As a result, Krispy Kreme said it will need to obtain additional credit by March 25, to fund operations and required capital expenditures. Cash from where? In a thinly veiled warning to its creditors and investors, Krispy Kreme did not offer any insight as to what it would do to come up with the cash. "There can be no assurance that the company will be able to reach any agreement with the banks or that funding will be available when and in the amounts needed," the company said. CIBC World Markets analyst John Glass had a suggestion: "Bankruptcy and (debtor-in-possession) finance could be one possible option." Like many of his counterparts at other firms, Glass thinks aggressive cost-cutting -- which included layoffs and divesting the corporate jet -- is the "right step," he said in a research report. But he wonders if the cuts will be enough, "given hemorrhaging sales in the past 12 weeks." Krispy Kreme previously reported average unit volumes systemwide plunged 18 percent in the first eight weeks of the quarter. Glass said that recent data suggests sales have dipped even further. To be sure, significant general and administrative cuts "are only part of the solution," according to J.P. Morgan analyst John Ivankoe. By his accounts, the company should have doubled the announced cuts to $20 million. And he thinks the number of stores should be slashed from 400 to about 330. Costly to close stores Legg Mason's Guard agreed. He wants to know how many stores are losing money, how fast can they be closed, how much would it cost to do that and would banks extend enough credit to accomplish that. Closing stores is a costly operation because it usually entails buying off leases, getting rid of equipment and paying severance and other closing costs. Those are all things that Glass contends Krispy Kreme can't do without borrowing money. Even if the company could find and follow the money, J.P. Morgan's Ivankoe sees more debt as "significantly dilutive" to shareholders. Ultimately, it will be the lenders who decide whether Krispy Kreme ends up in bankruptcy. Analysts believe that Krispy Kreme is still a viable concept that can continue to be a going concern once its financial and fundamental issues are cleaned up. But they're mostly not willing to wait around, encouraging clients to either get rid of the stock now or just sit tight and hold it. "Given all identified risks and the magnitude of turnaround required, we don't believe investors are fairly compensated," at current valuations, Ivankoe said. marketwatch.com