Krispy Kreme shares rise after pricing IPO at $17 per share

Krispy Kreme shares rose more than 5% after opening at $16.30 per share on Thursday afternoon, when the company returned to the public markets.

On Wednesday night, the doughnut chain priced its initial public offering at $17 per share, well below its planned range of $21 to $24 per share. The offering raised $500 million for the company and gave it an implied valuation of $2.7 billion. Krispy Kreme, which also owns Insomnia Cookies, is trading on the Nasdaq under the ticker "DNUT."

The chain first went public 21 years ago during the dotcom bubble. In 2016, JAB Holding, the investment arm of the Reimann family, took Krispy Kreme private after buying it for $1.35 billion. JAB owns a number of other restaurant businesses, including Panera Bread and Caribou Coffee.

"The transformation that this company has done in the last five years has been incredible," CEO Mike Tattersfield said on CNBC's "Squawk Box" on Thursday. "We've worked on our brand, we've worked on the culture."

In fiscal 2020, Krispy Kreme's revenue rose 17% to $1.12 billion, but the chain reported a net loss of $60.9 million. It has reported net losses for its last three fiscal years as it invests back into the business, like spending $10.3 million to reopen a 24-hour flagship location in New York City's Times Square and buying back many of its franchised locations. Now, about 85% of its locations are company-owned.

Krispy Kreme's start to trading comes during the busiest week so far in 2021 for U.S. IPOs, with at least 16 other companies making their public debuts.

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