If Twinkies can survive the apocalypse, they can also survive a bankruptcy.

16 11 2012

Hostess, the maker of Twinkies, filed a motion in bankruptcy court to liquidate.  This has sparked bidding on E-Bay for Twinkies.  People bidding on Twinkies are speculating that the Hostess bankruptcy will mean the end for Twinkies (and other Hostess yummies), and thus all remaining Twinkies will surge in value.

This is a bad bet.  The bankruptcy will result in an auctioning of trademarks (including the mark “Twinkie”), as well as the recipe.  It is almost certain that a private equity firm or a competitor will purchase both, and continue to make and market Twinkies.  The consumer won’t recognize the difference.  There may be a slight collector’s premium for “Hostess branded Twinkies.”  Although that premium is unknown, it is not going to be as large as a premium based on a complete cessation of all Twinkies.