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- Krispy Kreme jumped as much as 11.7% during its first day of trading.
- The doughnut shop priced its IPO below the expected range.
- The company's first day of trading pales in comparison to other IPOs this week that saw pops above 68%.
- See more stories on Insider's business page.
Krispy Kreme climbed as much as 11.7% to $19.00 per share during its trading debut on Thursday.
The doughnut shop franchise opened at $16.30, lower than its IPO price, but then pared back losses. Shares were trading around $18.50 as of Wednesday 1:05 p.m. ET.
Krispy Kreme raised $500 million by offering 29.4 million shares at $17, below the expected range of $21-$24. The company offered 2.7 million more shares than anticipated. At pricing, the company commanded a fully diluted market value of $2.9 billion.
That valuation was likely too high, according to David Trainer, CEO of investment research firm New Constructs.
"We think the stock is worth no more than $1.6 billion, which is slightly higher than the $1.35 billion JAB Holdings
paid to take Krispy Kreme private in 2016. With this IPO, we believe JAB Holdings is looking to cash out at the
expense of new investors," Trainer said in a recent note.
The analyst said that Krispy Kreme faces obstacles such as competition from larger food incumbents like Wendy's and a shift in consumer preferences toward healthier foods.
"Dough-Not buy this overpriced IPO" was the title of his research report.
Krispy Kreme is one of 18 companies to hit the markets this week in the busiest week for IPOs since December 2004. So far, its stock hasn't popped as high as others. Alzheimer's biotech company Acumen Pharmaceuticals soared 68.4% on Thursday during its IPO. On Wednesday, Didi jumped as much as 28% in its first day of trading, while shares of LegalZoom popped as much as 39% in their debut and cybersecurity company SentinelOne surged as much as 30%.
There have been 215 IPOs priced this year, a +225.8% change from the same date last year, per Renaissance Capital.
J.P. Morgan, Morgan Stanley, BofA Securities, Citi, BNP Paribas, Deutsche Bank, Evercore ISI, Goldman Sachs, HSBC, Truist Securities, and Wells Fargo Securities acted as joint bookrunners on the Krispy Kreme deal.