Krispy Kreme Plunges on No News

Shares in Krispy Kreme (KKD) plunged nearly 13% today on no news. Over 6 million shares were traded. At one point, the stock was down close to 28%. Amidst the carnage, the company issued a press release.

Although as a matter of policy the Company does not comment on unusual market activity or rumors, the Company stated that it is unaware of what has triggered the unusually high trading volume and decline in its stock price today.

Well, I can think of a few reasons for the sell-off. It might have something to do with the earnings warning. Or possibly, the federal investigation. Or perhaps, the SEC investigation.
After all, the company did have to restate earnings for the past four years. It turns out that they overstated their earnings by $22 million. On the other hand, it could the multiple franchisee lawsuits.
Maybe Wall Street was just overreacting.

Posted by on October 12th, 2005 at 11:23 pm


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