Giant Holes in Krispy Kreme Buyout

Who are the poor suckers on the other side of trades by Krispy Kreme stock sellers today?

Shares in the doughnut maker were up as much as six percent today on volume that's about six times its normal level.

The reason? A private equity firm made an offer to buy the company for a 45 percent premium to its recent share price, according to a report in the company's local paper, the Winston-Salem Journal.

While that's certainly cause for excitement, any investor worth his powdered sugar doughnut would look for a few more details before trying to turn a quick profit on the news.

The buyer, it seems, is a mysterious private equity firm with a bare-bones web site, a disconnected phone line, and a mailing address in a shared office suite in Charlotte, N.C.

The face behind the firm, as the Journal discovered in its second-day story on the deal, is a 23-year old named Jerry Demario Guess, who sometimes goes by Mario Guess, J.D. Guess and Jerry D. Guess, according to two lawsuits that have been filed against him.

When pressed by the Journal, Guess responded via his Gmail account: "Our offer is a legitimate offer and it's a transaction that we've been considering for quite some time."

In one lawsuit filed in April by an unwitting investor, Guess is described as "a 23-year-old high-school graduate who has been found guilty of writing worthless checks, charged with obtaining property under false pretenses, a defendant in more than 10 civil actions in N.C. state courts, and evicted from leased premises for nonpayment of rent."

While MGL's website purports to have $100 million in assets, Guess was found to have just $10,000 in assets in a disclosure as part of that case.

Someone is clearly profiting from this news. Too bad it's about as real as a chocolate iced cream-filled Krispy Kreme doughnut that's calorie-free.

by Megan Barnett