***** Crumbs Bake Shop, Inc. *****

Wanna see how people get “sucked” into a stock?

Crumbs Bake Shop, Inc. (NASDAQ: B-$3.41-A-$3.42).

Crumbs owns and operates 50 or so cupcake stores…33 of those locations are in the NYC metro area.
The Company was founded in 2003.
Based on Jeff Eats’ due-diligence- Crumbs’ business is an absolute disaster…lousy sales and definitely in the “wrong business.”
Since going public on June 15, 2010 Crumbs’ stock has traded in the $2-$16 range.

The way I see this “one”- When Crumbs went public, everyone and their mother thought it was going to be the next Starbuck’s. I guess the thinking was…it sells coffee, cupcakes and other types of pastries…so it’s the next Starbucks. Anyway…since its public debut, you could say the lustre wore off…

Yesterday morning- CRMB which was was trading around 2-bucks a share announced that it had inked a deal with Starbucks to sell Starbucks’ coffee in its stores. That announcement resulted in the stock trading up from $2 to a day high of $3.57.

Personally, I don’t think that the Starbucks’ deal is worth very much. I’ll bet you a nickel that those 33 NYC metro stores are all near an existing Starbucks store. For sure, sales may increase a drop, but if I was a betting man—not that big of an increase to turn a “bad” business into a good one. In addition, I seriously doubt that Starbucks as many are obviously hoping- will buy Crumbs out.

Right now as I “type” CRMB is trading at $3.42.

Regular Jeff Eats readers know that I consider the retail “cupcake” store business to be nothing but a fad. Like a real good game of musical chairs, there aren’t going to be too many winners, if any- when the music stops playing.

The bet here, Crumbs isn’t going to be one of the winners.

If this type of stuff interests you…do some reading-searching…

Crumbs is definitely an interesting read-NOT a stock buy.