Sweet redux on Krispy Kreme is not enough…

March 5, 2009

Nearly 5 1/2 years ago, when footnoted.org had only been around for a month, I wrote this post about Krispy Kreme (KKD), which at the time, was a Wall Street and media darling. Anyone remember that Andy Serwer love letter in Fortune?

At the time the stock was trading in the low 40s, but there was something in their 10-Q that caught my attention: some odd accounting for a bunch of related-party transactions. I thought about this yesterday when I read this release that Krispy Kreme and three former executives, including former CEO Scott Livengood, had settled with the SEC. The WSJ has the details here as does Bloomberg.

It may have taken 5 1/2 years, but it’s still nice to hear that someone else thinks you’re right. Of course, being right only goes so far. For the past week, I’ve asked readers to donate money to the site because advertising revenues have fallen sharply over the past few months. So far, only a few people have contributed. In the past, speaking fees and repackaging of footnoted content have also helped to cover the site’s expenses. But those too have fallen sharply. So unless something changes dramatically, I may have few choices but to put all of footnoted content behind a subscription wall. And then people who are willing to pay for the time and effort it takes to pore through SEC filings and find things like the Krispy Kreme find or this post on General Electric (GE) back when it was trading in the $20s, will have access to the content. And those that are unwilling to pay will not.

There’s a lot of smart people who read this site and I’m certainly open to suggestions on solving this in a way that works for everyone. So if you have an idea, please send it to me or post it below.

UPDATE 3/9: As of this morning, readers have contributed $425 to the site. While every donation is very much appreciated, this still only covers a little less than 1/3 of the costs of the site for the month of February. And that’s before I make a single dime. Given the sophistication of footnoted readers, I’m sure most of you understand that I can’t continue to lose money each month. I should also clarify one point: if footnoted content goes behind a wall, it will be less than the cost of FootnotedPro, which was designed for a different audience. I still welcome your suggestions and comments — I’ve received many great suggestions over the past few days — for coming up with a solution that works for everyone.


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