Glazed over: Krispy Kreme rises 23.5% in Wall Street return

AP Business

Krispy Kreme CEO Mike Tattersfield, center, applauds during the company’s IPO at the Nasdaq Opening Bell, Thursday, July 1, 2021 in New York. The Charlotte, North Carolina-based company, known for its glazed doughnuts, priced its initial public offering of 29.4 million shares at $17 a piece. That’s well below the $21 to $24 it was seeking. It raised $500 million and plans to use proceeds to pay down debt. (AP Photo/Mark Lennihan)

Investors, it turns out, were in the mood for donuts.

Shares of the Krispy Kreme chain returned to Wall Street and rose 23.5% Thursday, despite getting off to a bit of a lackluster start.

The Charlotte, North Carolina-based company known for its glazed doughnuts priced its initial public offering of 29.4 million shares at $17 a piece. That’s well below the $21 to $24 it was seeking. It raised $500 million and plans to use proceeds to pay down debt.

The stock trading on Nasdaq under the “DNUT” ticker symbol opened Thursday at $16.30 but then moved higher before finishing the day at $21.

The initial tepid reaction may have been an indication that Wall Street was unsure if a business selling doughnuts and coffee is the right pick when people have become increasingly health conscious.

Krispy Kreme announced in May that it was going to go public for a second time. After initially going public in 2000, the company was purchased in a $1.35 billion deal by JAB Holding in 2016 and taken private.

The chain operates in 30 countries. In the quarter that ended April 4, its revenue jumped 23% to $321.8 million, while its net loss narrowed to less than $1 million, from $10.9 million in the same period a year earlier.

The underwriters of the offering have a 30-day option to buy up to an additional 4.4 million shares at the IPO price, less underwriting discounts and commissions.

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