A big momentum play Green Mountain Coffee Roasters shares dropped 25% to $50.40 in late trades Wednesday after the company's sales fell well short of analyst expectations. Sales were forecasted to be $760.5 million vs. actual of $712 million.
Most of you may use products produced by GMCR maker of the popular Keurig single-cup coffee brewer. Green Mountain also produces its own line of k-cups as well as distribution agreement with the likes of Starbucks and Dunkin Donuts.
Hedge fund manager David Einhorn of Greenlight Capital who is short the stock has questioned the coffee company's accounting and transparency to investors. Here is the link to his detailed analysis that outlays his short position. Before Wednesday's earnings report, Green Mountain shares had tumbled 27% in last month. But the stock was still up 104% year-to-date.
Full disclosure DWCM holds shares of GMCR in its portfolio, no personal position is held.
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