
Think of it as market research. Klein’s 57th Street General Acquisition Corp., a special-purpose company, recently injected capital into Crumbs Bake Shop — the largest U.S.-based cupcake purveyor — to enable the 34-store chain to go public and expand to 200 locations by 2014. (The rumor that a newly activist SEC wanted to vet the deal because cupcakes are “derivatives” of cakes is false.)
Crumbs’ 82 percent, three-year compound annual growth rate could make this transaction as sweet for Klein and his investors as the cookies-and-cream cupcakes he likes so much. As to skeptics who say cupcakes are a fad, Klein retorts, “Cupcakes are well known, well respected and well liked.”