As the coronavirus pandemic subsides, the debut of the roller coaster reflects the turbulent environment of American restaurants.
Krispy Kreme Inc’s stock price soared on the first day of trading, and the doughnut chain received a much-needed boost after being forced to scale back its initial public offering.
In New York on Thursday, the stock reversed its early decline and rose 26% to $20.58 per share. The Charlotte, North Carolina-based company is owned by investment company JAB Holdings BV and has an opening price of $16.30, which is lower than the IPO price of $17.
As the pandemic subsided, the debut of the roller coaster reflected the turbulent environment of restaurants. Since Covid-19 has caused Americans to eat more at home, many American restaurants, especially those that focus on breakfast, are facing a difficult period of closing stores and declining sales.
Krispy Kreme CEO Michael Tattersfield downplayed the stock’s early performance, saying that he focused more on the investor base than the stock price.
He said in an interview: “I measure it a bit differently-when you look at the quality of investors you bring in an IPO.” Holder.
This week, more than 20 billion US dollars of IPOs began trading in the United States, which was one of the largest weeks in history. Chinese ride-hailing company Didi Global Inc. began trading on Wednesday after the company’s US-listed China’s second-largest listed company raised US$4.4 billion.
Krispy Kreme raised $500 million in its IPO on Wednesday, which is below the $640 million it sought. According to a listing document submitted to the U.S. Securities and Exchange Commission, the company initially sold these shares for between 21 and 24 dollars.
According to Bloomberg’s calculations, the stock rose 22% to $19.89 at 3:07 pm, giving the company a market value of approximately $3.2 billion.
Tuttsfield said Krispy Kreme’s goal is to add 1,000 points of sale each year, including stores, grocery containers and convenience store space.
The CEO stated on Bloomberg TV that the company believes there is “huge” room for growth in the United States and internationally. Brazil, China and Western Europe are considering growth.
“We are not in more than 150 countries,” he said. “So this is not planting the national flag in another country. This is the discipline to do it correctly.”
JAB acquired Krispy Kreme for USD 1.35 billion in 2016 and privatized it. JAB is an investment vehicle of Reimanns, one of Germany’s wealthiest families. It has expanded significantly in restaurants and beverages, and has control of Pret A Manger and JDE Peet’s.
Krispy Kreme has expanded e-commerce, and this service performed well during the pandemic lockdown. Driven by its Insomnia Cookies delivery concept, this part of the business now accounts for nearly one-fifth of US sales.
Tattersfield said the company does not just compete with other restaurants or candy manufacturers.
“You sometimes compete with the flower industry. On Mother’s Day, children sometimes prefer to give their mother a donut,” he said. “This is a very different business model, not necessarily only competing in the food sector.”
The issuance of Krispy Kreme was led by JPMorgan Chase, Morgan Stanley, Bank of America and Citigroup. The stock is traded on the Nasdaq Global Select Market under the symbol DNUT.