NEW YORK (TheStreet) --So this is how the cupcake crumbles.
Last Thursday, Crumbs Bake Shop (CRMB) hit an all time low of 2 cents per share, a few days after the cupcake chain shuttered all its stores and found its stock delisted from the Nasdaq stock exchange. By mid-morning on Friday Crumbs was trading at a high of 75 cents per share on the OTC market, a remarkable 2,500% return in a few short hours, and 3,700% in a few days.
The last time Crumbs traded at 75 cents was on March 20, right before it began its death spiral down the price charts. And that spiral appears to be back.
Monday the stock was at a high of 46 cents at 10:35 a.m., after opening at 28 cents. But it's about to get worse.
The reason for the large advance in Crumbs was a report from CNBC that Crumbs had garnered the attention of an investor group led by Marcus Lemonis, star of the CNBC reality TV show The Profit. Such a high-profile mention from CNBC, along with the star power of Marcus Lemonis, was enough to stoke the speculative juices of traders looking to profit themselves.
By the close on Friday, Crumbs was trading at 65 cents per share. Then more bad news hit.
Crumbs had indeed attracted the money it needed to survive -- except the lifeline came with a catch. The company would need to accept prepackaged Chapter 11 bankruptcy. Lemonis Fischer Acquisition will provide pre-petition secured financing to Crumbs as well as debtor-in-possession financing. This deal is considered the initial stalking horse bid in the court-supervised auction process under Section 363 of the bankruptcy code.