In midday trading, the Dow Jones Industrial Average (DJIA) is still bleeding red, down 1.5%. But things could be far worse, as is the case with Krispy Kreme Doughnuts , down 27.5% this afternoon and trading below the $5-per-share threshold. The stock is now at its lowest point since October 2005.

Thursday evening, the stock said its second-quarter loss expanded to $27.04 million, or 42 cents per share, topping a year-ago loss of 7 cents per share. Revenue dropped 8% to $104.1 million. Excluding items, the company lost 7 cents per share, 10 cents below analysts' expected profit of 3 cents per share on $110.1 million in sales.

In related news, the doughnut maker said it has closed several underperforming stores, and anticipates the need to shutter additional outlets in the future. Krispy Kreme is also planning to divest from an underutilized manufacturing plant. All of this moves are part of the firm's efforts to trim costs.

In intraday trading, KKD has been slammed with a downgrade from CIBC, which lowered its opinion of the stock to sector underperformer from sector performer.

Yes, the stock remains heavily shorted, with a short-interest ratio of 18.5 and 31.6% of its float sold short. But what are the odds of a short-covering rally transpiring anytime soon?