Carlo Cannell Goes Activist on Crumbs Bake Shop

Carlo Cannell, Crumbs Bake Shop: In a new activist filing, hedge fund manager Carlo Cannell reported a 13.1% stake in Crumbs Bake Shop Inc (NASDAQ:CRMB), a a neighborhood-focused bakery chain that sells cupcakes.

Cannell is an investor who has been very active of late, reporting stakes in Hooper Holmes, Global Telecom and others. With regard to Crumbs Bake Shop, the first thing you should know is this is an extremely small micro-cap stock. On news of Cannell’s stake this morning, shares are already up over 13% and Zacks thinks there’s even more upside.

While the primary business segment that Crumbs operates in–specialty cupcakes–is an extremely saturated market, the company is also moving into the gluten-free sweets business. It’s this venture that represents a very nice growth potential for Crumbs, and is likely what Cannell is betting on. What remains to be seen, though, is if the activist will attempt to influence the company to sell itself to a larger bidder.

Disclosure: none

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