Shares of Krispy Kreme fell 4 percent on the Nasdaq opening Thursday, five years after it took the maker of the “Original Glazed” donut private, valued at $2.62 billion in stock market returns.
The stock opened at $16.30, lower than its initial public issue price of $17.
Krispy Kreme had set an offering price of 29.4 million shares to raise $500 million, below a set range of $21 to $24 per share, during one of the busiest weeks for market debuts in the United States. indicates a weak response.
Krispy Kreme’s late founder Vernon Rudolph created the chain’s first donut in 1937, after spending $25 on what he borrowed from a local grocer, now called Old Salem.
The first donuts were delivered to a local grocer for sale after Rudolph took a back seat from a 1936 Pontiac and installed delivery racks.
He later had to cut a hole in the wall to set up a retail outlet to sell directly to customers wanting hot donuts.
Krispy Kreme now has approximately 1,400 retail stores in 33 countries and also sells at approximately 12,000 grocery, convenience and mass merchant stores in the United States.
Krispy Kreme posted a record net revenue of $1.1 billion in FY20. The donut chain said that about two-thirds of its donut sales in fiscal 2020 came from its “original glazed” donuts. It also sells coffee, drinks and sweets.
The company was taken private by JAB Holding in a deal worth $1.35 billion in 2016, when the investment firm was placing its bets on the coffee and restaurant businesses.
JPMorgan, Morgan Stanley, BofA Securities and Citigroup were the major book-running managers.