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

Posted on August 8th, 2012 · Music/Events/Other Stocks

***** 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.

5 Comments to “***** Crumbs Bake Shop, Inc. *****”

  1. RF says...

    Jeff: Have to agree with you 1000% here.
    Crumbs was acquired a few years ago by a blank check ipo. The stock did trade at $16. I agree back then everyone who bought in thought it was going to be the next Starbucks. Since that 16 it has gone as low as 2.
    I agree the cupcake business is a fad.
    Yesterday’s announcement got the stock from 2 to over 3.50.
    I agree that Starbucks coffee will help sales a bit but not all that much.
    CRMB goes down from here after people figure out what’s really going on there.

  2. ZED says...

    Saw its cupcakes in BJ’s.
    Stock is 39 cents.
    Good call.

  3. Emerald Green says...

    They are done

  4. Shelly Hechtman says...

    From: Shelly Hechtman
    Subject: Cupcakes

    Message Body:
    Now that the Crumbs chain has been delisted and closed all its stores, is the
    cupcake craze officially over?

  5. JeffEats says...

    Shelly Hechtman:

    Just had a chance to read your comments.

    The craze has been over for some time.

    Crumbs had to have known, but kept a “good face” for the public.

    Thanks for reading…

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