Green Mountain Coffee Is Now Down 40%

Nov 10, 2011
J. Webster
Comments Off on Green Mountain Coffee Is Now Down 40%

There are a lot of Green Mountain stock holders who are suffering right now as the stock went from $67 to $40 after a poor earnings report that left more questions on the table than answers.

The stock of course has been getting hammered ever since David Einhorn said he was going short GMCR, and laid out his argument for why the stock was over valued and perhaps even incorrectly reporting certain numbers. However, over on the Yahoo Finance message board there were some saying that Green Mountain remains a take over target. Here’s some good thoughts from one poster:

GMCR – Back as a Takeover Target?

$100+ to below $50… GMCR basically lost $8+ billion in market cap.

It’s been a very long time since I’ve been on these boards. Last time I added a decent size position was in the mid $20s (posted it on here), enjoyed the ride to $100+. Lost some money today on my remaining position, but it doesn’t nearly outweigh the long term profits. Watching very closely to add more, this test of $40 is interesting and tempted to add. Congrats shorts, you won the battle. Just like it would have been foolish to hold onto ALL the profits above $100+, it’s foolish to think that the downside is more attractive than the upside at this point.

Let’s not forget what happens when a company loses a lot of ground quickly… Takeover talk. So far there’s been no buyout, and last Fall was the time I thought it made the most sense for one. I still think it makes a LOT of sense for Coke since basically they dominate every other beverage category, has a history of large acquisitions (such as Vitamin Water), and they are losing out on a lot of $$ in coffee. Plus the Daft connection. Look up some of the older posts, makes a lot of sense, starts to make less sense as the shares get a lot more expensive.

We’ll see. Those that are comparing GMCR to NFLX don’t seem to understand how coffee is different than electronic content.

Would anyone really be “stunned” if a headline comes across “Coca-Cola to acquire Green Mountain Coffee Roasters for $XX Billion”?

What do you think? Is Green Mountain a take over target for Coke or maybe even Starbucks? As far as the stock price, some are saying if the stock breaks $40 a share it could drop to its 52 week low of $29.55.

Related Posts Plugin for WordPress, Blogger...

Comments are closed.