At the same time, three top officers named in the lawsuit - chief executive officer Scott Livengood, former chief operating officer John W. Tate and former chief financial officer Randy S. Casstevens - "unloaded more than 475,000 shares of Krispy Kreme stock for proceeds of $19.8 million," the suit charges.
Well, the financial reports indicate a decline in the sales, but Krispy Kreme officers didn’t want that information out…at least until they had a chance to pull a “Martha Stewart” on their shareholders.
The suit alleges that between January 2003 and last May, when Krispy Kreme issued a profit warning, "the company issued false and misleading statements, including false financial results" and "repeatedly ratcheted upward its public quarterly and fiscal year revenue and earning projections ... all in the face of slowing sales and market saturation."If you bought any shares between January 2003 & May 2004, then you’re part of the class-action lawsuit.
Krispy Kreme has blamed its problems on popularity of low-carbohydrate diets and high oil prices. But critics have argued that the company expanded too quickly and saturated its market by making its product available in grocery stores and convenience stores.I’m not so sure about that. Hmmm. Starbucks has been able to provide a grocery store/convenience store coffee product and they continue to expand internationally. Perhaps Krispy Kreme officers can get a better vision of their company’s future by getting some education from Starbucks.
Who knows? Maybe together they can collaborate and sell a…*cough*…coffee & donuts package to cops! (No – please – I can’t possibly turn down my LEO position to become a marketer. But thanks for the offer.)
Forbes has the story.