Why Krispy Kreme Stock Skyrocketed Today

Core Viewpoint - Krispy Kreme's stock experienced significant gains due to its inclusion in new indexes, despite a substantial decline in its share price over the year [1][2][4] Group 1: Stock Performance - Krispy Kreme's share price rose by 9.8% in a single trading day, outperforming the S&P 500 and Nasdaq Composite indexes, which increased by 0.5% and 0.4% respectively [1] - The stock had previously risen as much as 11.7% during the trading session before closing lower [1] - Despite the recent gains, Krispy Kreme's share price is down 71% year-to-date [2] Group 2: Index Inclusion - Krispy Kreme was included in multiple Russell indexes, including the Russell 2000 Value index and the Russell 3000E Value index, as part of the annual midyear recombination [4] - The inclusion in these indexes necessitates that exchange-traded funds (ETFs) and other funds purchase Krispy Kreme stock to reflect its new status [4] Group 3: Recent Challenges - The company has faced downward pressure following the end of its partnership with McDonald's, although its shares are only down 1% over the last month [5] - Krispy Kreme reported a revenue decline of approximately 15% year-over-year, totaling $357.2 million for the quarter, and posted a non-GAAP loss per share of $0.05, a shift from a profit of $0.07 per share in the same quarter last year [6] - Currently valued at around $496 million, Krispy Kreme's stock trades at just 32% of this year's expected sales, indicating a potentially undervalued position, but stability in sales and margins is necessary for a sustained rally [7]