Sweet news! Krispy Kreme shares will cost less than 500 pesos to go on the Nasdaq index

Donut chain Krispy Kreme expects to raise between $ 560 million and $ 650 million in its Initial Public Offering (IPO) and you can purchase shares of the company when they are listed on the Nasdaq index.

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Entrepreneur Staff
5 min read
This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

For more than eight decades, Krispy Kreme has sweetened the palates of its customers, and now it can spice up your wallet too. The donut chain is getting ready to trade on the Nasdaq index under the symbol DNUT . In its initial public offering (IPO) the shares will be priced between $ 21 and $ 24 each. This means that you could own a part of the company for less than 500 Mexican pesos .

According to documents filed on June 22 with the United States Securities and Exchange Commission (SEC) , Krispy Kreme plans to offer 26,666,667 common shares on its IPO . In addition, subscribers will have the option to buy more than 4 million additional shares, reported Banking Business .

The Krispy Kreme shares would have an initial value of $ 21 to $ 24 per unit , that is, between 424 and 484 Mexican pesos at the current exchange rate. Thus, they project to obtain net profits of 560 to 650 million dollars in the most optimistic scenario (that they sell even the additional shares at the maximum price). With this in mind, his goal is to reach a market value of $ 3.86 billion .

"Krispy Kreme is an iconic and globally recognized brand with a rich history that is embodied in our original fresh glazed donut ," the company said in the SEC filing.

“We are one of the most beloved candy retailers in the United States and in many markets around the world. We have an extremely loyal, energetic and emotionally connected consumer base, and leading engagement rates 19% higher than similar ones in the global indulgence market, ”they add.

Should you invest in Krispy Kreme stocks?

The famous chain's history dates back to 1937, when it opened its first store in North Carolina and began selling donuts in local supermarkets.

The company was first listed on the Nasdaq Stock Exchange in 2000 under the ticker symbol KREM. The following year it was traded on the New York Stock Exchange using the KKD ticker. However, they had to file for bankruptcy for 2005.

In 2016, Krispy Kreme became a private company when the European conglomerate JAB Holding bought it for around $ 1.35 billion . In fact, in the S-1 presentation it is established that JAB would continue to be the majority shareholder with 38.6% of the shares, since only 16.6% of these will be publicly offered and the rest will be distributed among minority investors.

Last year, the chain sold 1.3 billion donuts in 30 countries, the highest level of sales in the brand's history. This brought him net income of about $ 1.12 billion, while his net loss was $ 64.3 million. From 2016 to 2020, net income registered a compound annual growth rate of 19%.

Although the Covid-19 pandemic caused the temporary or permanent closure of several Krispy Kreme stores, the company remained afloat thanks to its omnichannel business model. Their donuts are sold in convenience stores, supermarkets and via e-commerce with home delivery, which was perfect to satisfy the craving for sweet snacks during confinements.

The offering will be led by JPMorgan , Morgan Stanley , Bank of America Securities (BofA) and Citigroup . Krispy Kreme's list of individual store owners includes celebrities such as legendary NBA player Shaquille O'Neal .

And you, do you dare to make a sweet investment in Krispy Kreme?

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