Marcus Lemonis, star of CNBC’s The Profit is one of a group of investors that has pledged financing in order to save Crumbs Bake Shop Inc (OTCMKTS:CRMB) from dissolution. The financing, which was rumored through the day on Thursday and finally confirmed this afternoon, drove the price of the companies stock upward at an incredible rate. At time of writing the stock stood at around 47 cents, up more than 1,400% for the day so far. Shares in Crumbs Bake Shop Inc (OTCMKTS:CRMB) were delisted from the Nasdaq and began trading over-the-counter earlier this month. The company’s shops closed their doors across the country last Monday, reaping the rewards of what appeared to be its final Fourth of July weekend.
Lemonis aims to revitalize Crumbs world
According to CNBC, the group that saved Crumbs Bake Shop Inc (OTCMKTS:CRMB) is going to attempt to incorporate other similar companies, including Sweet Pete’s, a Florida sweet shop which is owned Crumbs Bake Shop Inc (OTCMKTS:CRMB). The amount that the group invested in order to save the company was not released along with the statement confirming the financing. Lemonis, who is CEO of Camping World and Good Sam Enterprises along with being a TV star in his own right, appears to be leading the consortium alongside the Fischer Family Trust, a foundation belonging to RM Education founder Mike David Fischer Crumbs Bake Shop Inc (OTCMKTS:CRMB) investors who sealed in their losses and sold their stock for pennies will be kicking themselves at the news, but those who held on are seeing some welcome respite.
Crumbs Bake Shop shows highs and lows of cupcake boom
Crumbs Bake Shop Inc (OTCMKTS:CRMB) epitomized one of the more interesting movements in the food business in recent years. The company benefitted hugely from an unusual rise in the popularity of cupcakes across the United States. The firm’s stock hit a high of more than $13 per share right after it listed in 2011. A subsequent crash in its value lead to a slow decline and its eventual delisting from the Nasdaq. A CNBC interview last April saw the Crumbs Bake Shop Inc (OTCMKTS:CRMB) CEO admit that the firm’s business model, which centered on the cupcake, was unbalanced and “too tight a niche to attract a sufficient number of people.” That thought didn’t occur to those who valued the company at more than $100 million when it first went public. Crumbs Bake Shop Inc (OTCMKTS:CRMB) seems set to survive for the time being, but the company is going to have to demonstrate its viability, and get a few stores open, in order to convince the market that it can continue operations. The free publicity from the company’s closure and dramatic savior, may be enough to help lift sales. Mark Lemonis may know something about cupcakes that everyone else doesn’t, but he’s certainly an able promoter. Perhaps Crumbs Bake Shop Inc (OTCMKTS:CRMB) can survive, but the future of this investment is riskier than most.