Now, why on earth would anyone invest in Krispy Kreme Doughnuts (NYSE: KKD)? Sure, if you were bored one day and wanted to do some gambling because you couldn't make it to a casino, then you maybe could use a little bit of your risk capital to fool around with the everyday gyrations of the shares. Other than that, there's no reason to consider this once-hot stock of yesteryear.

As one might expect, Krispy Kreme reported a GAAP loss for the third quarter. The red ink was worth $0.09 per share, which was eight pennies worse than the previous year's quarter. The press release talks about a few factors that affected the dismal showing. Let's see, increased commodity costs led to higher doughnut-mix prices. Shortening was also more expensive. Then there was the increase in gasoline prices. Of course, the release was quick to point out that fuel prices did retreat recently, so I don't think the company will be able to use that excuse next time around. Krispy Kreme has a load of problems that go beyond the macro environment. Simply put, it's a mess of a company that needs to get its turnaround act in order.

Stepping away from the bleak GAAP picture for a moment, I will say that Krispy Kreme did improve its free-cash-flow prospects. Net cash from operations saw an increase, and capital expenditures saw a decrease. That may be a welcome improvement, but in no way does that mean I suddenly see value in this business. Krispy Kreme's brand equity needs a radical jumpstart, and I'm simply inclined to pass on the stock.

Disclosure: I don't own any company mentioned; positions can change at any time.

Troubled business Krispy Kreme Doughnuts (NYSE: KKD) wants to use one of America's favorite treats -- ice cream -- to help bring it back to its glory days. The ice cream will be a soft-serve concoction, and the hope is that it will add another dimension of value for Krispy Kreme's patrons beyond the core doughnut portfolio. I guess the former pastry star thinks that if you're not in the mood for a doughnut, maybe you're in the mood for ice cream. (Full disclosure: I don't like ice cream!)

You know, I can't really criticize the effort. Seems like a simple enough way for Krispy Kreme to expand its base of offerings. But will it suddenly set the company on a path of unfettered growth? I can't say I see that. From an investor's point of view, Krispy Kreme is the same stock to be avoided as it was before I read about this ice-cream initiative. In fact, it was only recently that I took a look at the company's earnings and realized that I remained a bear on the business. I still think investors would be better off looking at ideas such as McDonald's (NYSE: MCD) and Burger King (NYSE: BKC) before Krispy Kreme. Yeah, they're not big on doughnuts, but they do well with burgers and fries, and they're a better way to play chains that sell less-than-healthy foodstuffs.

The ice cream plan is definitely a worthwhile experiment. But if management is just going to throw it on the menu without launching an aggressive advertising campaign in support, then I'm not sure how much good it can actually do. I've seen turnaround plans before that try to exploit some new product or project but fail to give it a proper push. We'll have to see what kind of push Krispy Kreme goes for with its ice cream, but I'm still not a buyer of the stock.

Disclosure: I don't own any company mentioned; positions can change at any time.

Later today, after the market closes, Krispy Kreme Doughnuts (NYSE: KKD) will serve up second-quarter numbers for fiscal 2009. And as far as I'm concerned, I'm expecting nothing great at all from this horrible company and its equally horrible stock. Yeah, I know, Krispy Kreme been a trader's dream this year. Krispy Kreme's shares have risen nearly 27% this year. On a six-month basis, the performance is even better: the stock is up more than 54% during that timeframe.

Sure, some have made money this year trading the famous doughnut maker. Still, on a 5-year basis, the stock has lost 90% of its value, and on a 3-year timeline, the decline is around 40%. The stock closed at $4 per share on Wednesday. Do I really want to buy this lottery ticket ahead of the earnings? Maybe if ultra-risk capital were involved, and I was willing to lose it all. I really don't expect to be blown away by the earnings report if the past is any indication. According to Earnings.com, Krispy Kreme has reported many misses. Granted, last quarter wasn't too bad. As Trey Thoelcke found, the company swung to a profit of $0.06 per share. This represented a good round of earnings growth. Revenues, however, had decreased 7%.

Last quarter's bottom-line improvement in no way excites me. The way I see it, this is a speculative idea at best, one that really doesn't have much of a bull thesis. Again, the stock performance argues against me, and the company could beat estimates if it can repeat its recent performance. The call for Krispy Kreme's Q2 income is a loss of $0.01. I mean, would it be so difficult to merely break even, or maybe book a penny or two of positive earnings per share?

Dealbook is reporting (although speculating is probably a better word) that Krispy Kreme Doughnuts (NYSE: KKD) may be preparing to put itself up for sale. This shouldn't come as too much of a surprise given the problems Krispy Kreme has experienced over the last few years.

Just in 2007, Krispy Kreme fell from nearly $14 a share to under $3. Although this is bad enough, the long-term picture is even worse. In 2003, Krispy Kreme hit $50, so the five year performance is something like negative 90%. While health fads are in part to blame, with carbohydrates being vilified in many popular diets, most analysts suspect that Krispy Kreme's management is largely responsible for the poor performance.

Marketplace's Herb Greenberg, who has long thought that Krispy Kreme's old CEO needs to go, is the main source of speculation that Krispy Kreme may be looking for a buyer. He argues that the recent resignation of the old CEO, Daryl G. Brewster, suggests that the board is finally getting serious about turning things around. More importantly, the new CEO, James H. Morgan, has an investment banking background, and his involvement suggests that the company is looking for outside intervention.

Yesterday Zac Bissonnette reported that Wells Fargo (NYSE:WFC) employs a historian to create genealogies for their wealthiest customers, and wealthy non-customers they wish to cultivate. This caused me to wonder if this stroke of genius might not be transferable to other markets. In this age when every business is identifying their best customers, might they not reward their customers with the services of a professional? For example:

• Wal-Mart's (NYSE: WMT) Sam's Club customers would love their own stevedore.
• For Anheuser-Busch's (NYSE: BUD) biggest spenders -- a chauffeur, or a bail bondsman. Either would be useful.
• Krispy Kreme Doughnuts' addicts (NYSE: KKD) -- Their own cardiologist.
• For Abercrombie and Fitch (NYSE: ANF) customers- a personal bikini-waxer. (I wonder if this is truly a profession?)
• For devotees of the Apple iPod (NASDAQ: AAPL) -- why not a personal audiologist? I said A PERSONAL AUIDIOLOGIST.
• For Waste Management Inc (NYSE: WMI) customers -- their own aroma therapist.
• For JetBlue Airways (NASDAQ: JBLU) frequent flyers – a personal anger management coach.
• For DaimlerChrysler AG (NYSE: DCX) loyalists -- a magician to teach them the trick to turning five pounds of crap into a steak dinner.
• Harley Davidson's (NYSE: HOG) favorite customers –- A personal wardrobe consultation with Dog, the Bounty Hunter.
• Sara Lee Corp (NYSE: SLE) – Their own seamstress, expert at letting out seams.
• PetroChina Co Ltd ADR (NYSE: PTR) -- Their own personal Oxfam volunteer.

And for you, our most loyal and treasured BloggingStocks reader: A personal chef, to prepare and serve my bologna.

Still plagued by health and obesity concerns, Krispy Kreme Doughnuts, Inc. (NYSE:KKD) introduced a new, healthy donut yesterday. This is a whole wheat donut with a sweet caramel flavoring covered in the original Krispy Kreme glaze.

This donut is hitting headlines because it is only 180 calories -- a great reduction from the company's "original recipe" donuts. Despite the calorie reduction, Krispy Kreme's Senior Vice President of Marketing said the donut "delivers the delicious taste that our customers have come to expect from us." The donut will be available starting February 26, 2007, at participating locations.

This product could potentially begin bringing back consumers the company has lost during the original health and low-carb scares and accelerate the company's coffee and drink businesses. Still, I wouldn't touch the stock (KKD) with a ten-foot-pole, whole wheat donuts or no, due to the ridiculous uncertainty surrounding the company and the premium valuation (on a P/S basis) to the Dunkin Donuts buyout price.

A well-known writer once described criticizing literature as the equivalent of attacking a donut. Well, in his latest column from last week, MarketWatch columnist Herb Greenberg went after Krispy Kreme Doughnuts Inc. (NYSE:KKD), and questioned its latest financial statements.

Granted, this is not the first time that Greenberg, one of Wall Street's most prominent bears, has gone after Krispy Kreme. In 2004, he named former CEO Scott Livengood the "Worst CEO of the Year," and cited him for "the destruction of more shareholder value than almost any other CEO this year -- and it was result of greed, questionable dealings with insiders and falling into the trap of believing his own press clippings rather than paying attention to the details of the business."

In his latest column, Greenberg is on Krispy Kreme again, this time for improving cash flow, mainly by reducing the allowance for doubtful accounts by $10 million. He also raises questions about the stock's valuation, claiming that while KKD trades at around 1.74-times sales, its profitable franchises "last year sold to private equity for about half sales."

Granted, while Herb Greenberg has been wrong before (bearish on Hansen Natural for a year), he's right more often than not, and his logic looks compelling here. Numerous questions still surround Krispy Kreme and, with a market cap of $800 million, investors appear a little too optimistic. As for me, I will avoid the shares for now.

Today on MAD MONEY: sweet nothings. Jim Cramer said on this evening's show that, while there are some analysts whose recommendations he wouldn't touch with a 10-foot pole, Prudential's Howard Penney isn't one of them. When Prudential initiated Krispy Kreme Doughnuts (NYSE:KKD) with a 'buy' recommendation last week, Cramer agreed. [But disagreeing with the general consensus among BloggingStocks writers, it should be pointed out.]

Although Cramer admitted he has made a joke of KKD for five years, but he says now it is worthy of a "Buy." Prudential's analyst report converted him thanks to his "honest y" and previous good calls, such as OSI Restaurant Partners, Inc. (NYSE:OSI).

Cramer explained that Prudential has no conflicts because the company does no investment banking. There is risk here, but if you look rationally at the stock the call makes sense. The company's doughnuts are good and, as Prudential points out, international prospects can outweigh the historically dismal financial performance.

Cramer said that anyone who owns the stock now has already weathered a storm and isn't going to panic. They are all strong holders and the shorts are out in force on the name still.

Jon Ogg is a partner in 247 Wall Street and he does not own securities in the companies he covers.