Before trading was stopped, the Crumbs cupcake chain’s stock had dropped from $13 to 27¢ and today it announced it’s closing what few of its stores remain. The one in Greenwich closed long ago. The best way to make money on a hare-brained scheme like this is to be the underwriter.* The next best way is to be a stock broker, and foist the crap on stupid clients.
* “A holding company called 57th Street General Acquisition Corp. acquired Crumbs and took it public in June 2011 at a price of $13 per share. Crumbs had 35 locations at the time.” Yet at the same time the company’s shares were being peddled to the public…
“Crumbs’ troubles began in mid-2011, when it was orchestrating a massive expansion, according to former Crumbs President and CEO Julian Geiger. Same-stores sales started declining as the cupcake market was rapidly growing more crowded and analysts began warning of a possible cupcake bubble.” That’s called in the parlance, “getting out while the getting’s good.”
UPDATE: The underwriter was something called Ladenberg Thurman, associated with Securities America. I’m no longer in the stock fraud business, but if your grandmother lost money on this deal, she might want to consult with an attorney member of PIABA, Public Investors Arbitration Bar Association.