Martha Stewart must be having a conniption fit right about now. She did five months in the federal pen and another five under house arrest for selling less than 4,000 shares of ImClone on an insider tip that wasn't even hers.
It has been revealed that Green Mountain Coffee Roasters (GMCR) founder Robert Stiller was informed by Starbucks that they were about to enter the single serving coffee market a couple weeks before it was formally announced. Now it looks like Stiller then promptly dumped a million shares of GMCR before the announcement was made public:
I've always believed that where there's smoke, there's fire. And GMCR has some pretty high profile detractors who've been crying foul for quite some time.
David Einhorn went after them in this presentation with a vengeance I haven't seen since he did his famous hatchet job on Lehman at the Ira Sohn conference in 2008. And convicted fraudster-turned-whistleblower Sam Antar has been hounding the company for two years now.
So what do you guys think? Is this a clear cut case of insider trading? And is GMCR a scam? If so, you know what that means:
Best. Short. EVER.
It is probably insider trading, but good luck prosecuting it. Unless they were dumb enough to communicate via emails, it is darn hard to prove. Even calls between personal lines could be justified as part of doing business.
I would be hesitant to call GMCR a scam; I think it is just a poorly run company. However, they have mislead investors about the severity of their patent issue, but that issue has been out in the open for a long time...I cannot imagine investors buy whatever management puts out 100% of the time.
Edmundo, you're often spot-on, but you're missing the mark here. GMCR a scam? You know they own Keurig, right? This may be a pretty clear-cut case of insider trading, but if you take a good look at the business model I think you'll agree that using the word "scam" is a pretty uninformed way of describing the business. Perhaps I am confused - are you suggesting GMCR is somehow a ponzi scheme? What's your basis for that?
I guess my point is that if you were involved in the coffee markets, you'd know GMCR is a pretty solid company, with a hell of a grip on the single-serve market - the most rapidly growing segment of the roaster market. I'm not opining on whether it's a good short or not - I'm just saying that anyone who uses the word "scam" in the same sentence as "GMCR" in informed circles - will sound like they don't know what the fk they are talking about.
Dont know about the insider stuff but GMCR was a shitstorm since 2010
They were running negative sales returns provisions for fucks sakes!
Eddie, no comments on certain events in the north sea? Figured you would be all over that today.
AVP, their accounting has been a disaster for years. The nitwits at the SEC have even whacked their pee-pees over it. Go read what Antar has been saying since 2010 and you'll see why I feel safe insinuating that it might be a scam. It's not a value judgement of their business model or their market share (but I expect that to get hammered when SBUX ramps up), just an uneasy feeling I have about their accounting practices.
Likewise, if you'd called Enron a scam around those "in the know" in 2000 you'd have been laughed out of the room. How'd that work out?
IP, I've just got my fingers crossed that we're not looking at another Deepwater Horizon. Can you imagine how that conversation would go if the unthinkable happens?
"Alright, which one of you dipshits forgot to shut down the open flame near the gas leak?"
The timing of the sell makes it pretty obvious he had MATERIAL, NON-PUBLIC information. They'll never prove it though.
My nightmare is the frenchies trying to clean up an oil spill. They are probably going to take a halfhearted approach for a short time, surrender after five weeks, and ask the Americans and British to bail them out, like they almost always do.
Truth. If there is a least optimal way to manage the crisis, the French will find it.
GMCR plunged 40% overnight..Another good call Eddie.
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