When Dunkin' Brands (DNKN) goes public tomorrow, its shares will be offered at a premium to...


When Dunkin' Brands (DNKN) goes public tomorrow, its shares will be offered at a premium to those of rival Starbucks (SBUX) - a premium Dunkin' hopes to justify with its ambitious expansion plans. However, some investors could be worried about Dunkin's Q1 net loss, as well as the heavy debt load its private equity owners have saddled the company with.

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Comments (4)
  • Tom Au, CFA
    , contributor
    Comments (6879) | Send Message
     
    Dunkin Brands has a weaker franchise than Starbucks, so it's hard to see how it would command a premium in the stock price.
    25 Jul 2011, 02:11 PM Reply Like
  • Neil459
    , contributor
    Comments (2636) | Send Message
     
    Makes one wonder if this is just a bail out for the private equity owners. Going public with a net loss and heavy debt, just screams "danger, danger, danger Will Robinson".
    25 Jul 2011, 02:36 PM Reply Like
  • Gary Jakacky
    , contributor
    Comments (2946) | Send Message
     
    Dunkin Brands has a much BETTER franchise than Starf**ks ever will. They have good coffee and baked goods at a good price; Starbucks sells stale and dry pint sized fancies at Pepperidge farrm prices.

     

    There are other reasons to dislike the DD ipo price. Investors should remember that American runs on DUNKIN...not on HEDGE FUNDS. The same hedgies who ran up the debt and recent losses will still own most of the company. Keep in mind that Tim Hortons, a similar franchise to DD in Canada, has a PE in the low teens.

     

    cyclingscholar
    25 Jul 2011, 02:36 PM Reply Like
  • warrenrial
    , contributor
    Comments (550) | Send Message
     
    SA has this story all wrong.
    26 Jul 2011, 04:11 PM Reply Like
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