The deadline for competing bids for Crumbs Bakeshop (CRMBQ and CRMUQ) has come and gone with no offers besides the stalking horse bid (see my previous post on that).
Per Dow Jones Newswires yesterday:
DJ CNBC’s Lemonis Will Likely Sweep Up Crumbs — Market Talk
13:29 EDT – A possible revival of Crumbs Bake Shop at the hands of CNBC personality Marcus Lemonis and Dippin’ Dots owner Fischer Enterprises is closer to reality after a Tuesday deadline to submit competing offers for the shuttered company came and went with little fanfare. A Crumbs spokeswoman says no bidders emerged to challenge a $6.5M debt-forgiveness offer from Lemonis and Fischer, so the cupcake chain will ask a bankruptcy judge to cancel a scheduled auction. If approved by the court, the sale will likely lead to a new kind of Crumbs store which incorporates the buyers’ other dessert brands. (firstname.lastname@example.org; @sara_randazzo)
(END) Dow Jones Newswires
I have started averaging into a final short position in both Crumbs stock (CRMBQ) and Crumbs units (stock plus warrants) as the company should emerge from bankruptcy in a month (and the stock should drop precipitously before then) with shareholders getting completely wiped out and most debt holders suffering large losses.
11 thoughts on “The End is near for Crumbs Bakeshop $CRMBQ $CRMUQ”
Today the above news made it to the WSJ http://online.wsj.com/articles/crumbs-bake-shop-cancels-auction-seeks-sale-to-investors-1408648148?mod=yahoo_hs and likely explains the big late-day drop. I covered my CRMBQ short at .075 from .166 this morning lol. I remain short CRMUQ
What does this mean for Crumbs stock. ? Will it go up ? Will it even exist anymore? Should we buy ?
This means that there is now a 99% probability that Crumbs stock will be cancelled when the company emerges from bankruptcy and shareholders will get nothing. Many bondholders and trade creditors will get shafted as well.
But if it turns around and becomes a successful business what happens then to shareholders? .
They still get nothing. The Fischer/Lemonis bid is a credit bid which means they are only bidding the money they are already owed — so most trade creditors and bond holders get little to nothing and shareholders get nothing. If they turn around the business then Fischer/Lemonis will make nice profits for themselves.
What about investing in crumbs after it gets back on its feet? Will that even be possible, will it still be a public stock?
Crumbs will be merged with and into FIscher/Lemonis’s company that includes Dippin’ Dots and other brands. It will be private.
Very interesting article Micheal, very thought provoking. I will be paying close attention to this stock
to see if it will rise beyond its resistance point and effectively reach a few more dollars per share. i am looking forward to testing out your theory on Support and Boilinger band theory. thanks once again.