Why was it ever a good idea to make a multi-store cupcake chain into a publicly traded company?
This is obviously about Crumbs which shut its 30-somewhat stores this week. As I understand it, the stock market is a bet that a company is going to be around for a long time (decades) and will make steady profit and growths. Cupcakes seemed like a trend that stayed around for a while and are now receding. Crumbs started when Sex in the City created a demand for cupcakes and Magnolia bakery (the store featured in SATC) refused to expand beyond their little Greenwich Village store front.
This worked great for a while until it did not. I can understand wanting to franchise a business like Crumbs but it seems like folly to make it a company with stocks.
Do the more business and economically oriented people here have any defenses for turning Crumbs or any other faddish one hit wonder into a publicly traded company? Any insights into what an investor would be thinking? Did they really think the cupcake trend would go on forever?