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Krispy Kreme facing business valuation crisis

Dec 29, 2010 Todd Milner

Krispy Kreme has long been known for making tasty treats, but to get out of its current financial shortcomings, the doughnut-making giant is in need of business valuation tools, which will get the company back on track after disappointing stock showings. According to The Wall Street Journal and BGB Securities, the company's stock value has dipped enough that BGB currently views Krispy Kreme stock as not worth owning. The company is currently paying back $200 million in net operating losses, BGB wrote in Barrons. "In our opinion, Krispy Kreme shares are priced for perfection, and the company has yet to demonstrate that it can deliver the type of growth that would justify the multiples at which Krispy Kreme shares are currently trading," BGB states. BGB cites difficulties the company has experienced introducing new products, problems facing storefront locations (including the closing of 54 locations in Australia) and stagnated stock prices as reasons why Krispy Kreme's business valuation is on shaky ground.