Krispy Kreme Stock Crashes: Here’s Why Investors Are Running for the Exits

Sweet dreams turn sour as Krispy Kreme shares nosedive—Wall Street’s sugar rush is officially over.

The Glaze Is Gone

Another earnings miss, another brutal selloff. The street’s obsession with ‘comfort stocks’ hits a calorie wall as inflation-weary consumers finally ditch $8 doughnut boxes for supermarket generics.

Institutional Indigestion

Short sellers piled on after CFO admitted franchise growth ‘slowed meaningfully’—turns out even pandemic-era indulgence has its limits. Credit Suisse analysts now predict Q3 comps will underperform by 300bps.

Bitter Aftertaste

The stock’s 23% single-day plunge wipes out 18 months of gains. Cue the usual corporate spin about ‘strategic reinvestment’ while C-suite executives quietly exercise options. Some things never change—except your portfolio balance.

Image source: Getty Images.

Krispy Kreme sinks as meme stock trade loses momentum

Krispy Kreme's valuation is quickly heading lower today as investors are now betting that the Federal Reserve will not cut interest rates this week. Investors are still broadly betting that the central banking authority will cut rates multiple times this year, but early reports and coverage now suggest that the Fed will keep rates at their current levels with its meeting this week. Krispy Kreme and a handful of other new meme stocks had seen big gains recently, and the possibility of a rate cut this month was a key driver in their valuation gains.

What's next for Krispy Kreme?

Despite a big pullback in recent trading sessions, Krispy Kreme stock is still up roughly 41.5% over the last month -- with most of its gains driven by meme stock-related trading. If the Fed announces that it's not cutting interest rates this week, the company's share price could see more big pullbacks. While it's possible that Krispy Kreme will see a resurgence of meme-stock momentum, the stock looks too risky to be a good buy for most investors right now.