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David Einhorn Short-Selling Green Mountain Coffee Roasters (GMCR)

Ian Wyatt

At the Value Investing Congress in New York City this morning, renowned
hedge fund manager and short-seller David Einhorn slammed Vermont-based
Green Mountain Coffee Roasters (Nasdaq: GMCR). Within
minutes of his +100 slide PowerPoint presentation, shares of the
single-serve coffee maker were sinking, and at mid-day the stock was down
roughly 10 percent.

During a 45-minute presentation Einhorn
highlighted his many concerns, including:

  • Green Mountain Coffee continues to be
    changing and reducing its quarterly financial disclosures, making it
    increasingly difficult for analysts to understand the performance of the
    business.
  • The inquiry from the Securities and
    Exchange Commission (SEC) remains outstanding and is a risk to the
    company and the stock.
  • Internal accounting controls are
    insufficient for a company of this size.
  • Bullish investors and analysts following
    the company overstate the market potential for Green Mountain Coffee
    since the low-hanging customers have already purchased.
  • Sales of K-Cups per Keurig machine
    (defined as

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