Donuts Will Save the Economy (Again)
What our fragile economy needs is a white-hot IPO of a famous but mundane consumer food brand! Well it is our lucky day, fellow unfortunate members of the US economy: mediocre donuts are here to save us—again!
Dunkin Donuts went public yesterday, and its stock immediately shot up by more than 40%, because it's fun to invest in companies you've actually heard of, right? The sky is the limit for Dunkin Donut's dough-based reign of financial prosperity! They plan to double their number of stores in 20 years! America will never tire of hot fried carbohydrates and even hotter caffeinated water! This will be the biggest boon to Wall Street since the equally hot IPO of Krispy Kreme, a decade ago!
Oh, right. Its value plunged by more than three quarters from its post-IPO high. Or perhaps, as this story suggests, Dunkin Donuts is the new Boston Chicken, another hot fast food brand that had a big IPO in the 1990s only to flame out into bankruptcy several years later. Or maybe Dunkin Donut is actually more valuable than Starbucks, which would explain why investors are paying 80 times earnings for it, while they pay less than 30 times earnings for Starbucks.
Who knows? You can't trust Wall Street, which got us into this mess; and you can't trust Main Street, which is legendarily ignorant of the intricacies of investing. You can only trust your own gut. Which is telling you that it likes donuts.
