Could Krispy Kreme Become a Meme Stock?
Launching its IPO on June 30, Krispy Kreme (NASDAQ: DNUT) took its doughnut chain public at $17 a share, an amount investors almost immediately drove upward to over $21. However, following its second-quarter 2021 results, the newly minted public company saw its shares decline. On Friday, Sept. 17, the company's stock experienced a more than 7% one-day plunge in value. This, combined with the fact it was the third-most-mentioned stock on the WallStreetBets Reddit subforum at the time of its IPO, has led to speculation it could become a "meme stock" -- but is such a possibility realistic? Important factors seem to weigh against it.
After its initial jump, traders appear to think Krispy shares are somewhat overheated and should be trading at a more modest level. Its Q2 earnings report shows revenue climbing approximately 43% year over year to $349.2 million. Even this gain, of course, is mostly a rebound from the lockdowns and closures of 2020's COVID-19 response. It boosted its worldwide "points of access" about 15.7% year over year. However, at the bottom line, its net loss increased about $3.3 million compared to the same quarter last year, and adjusted loss per share went from a $0.10 loss in Q2 2020 to a $0.13 loss in Q2 2021.
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Source Fool.com
