Greenlight's Short on GMCR
Green Mountain Coffee Roasters (GMCR) is a Vermont-based company that sells coffee brewing machines and single-serve "K-cups". If you've worked in an office, you've probably used one of these things at some point. Several notable funds, including Lone Pine and JAT, have held significant positions in GMCR in the past few years.
The 110-slide presentation can be found here: http://www.mediafire.com/?l6oka4o4wx1yck7
Einhorn's performance has been relatively innocuous since his Lehman call. Do you think he's on-point with this one?
It's a very interesting read. Given the ridiculous rally in the GMCR shares over the last few years, current market sentiment definitely makes a good time for him to publicise the position. Took a quick look earlier in the day and apart from the somewhat questionable analysis on pg27, it seems like a very solid and detailed analysis (as you'd expect from Greenlight).
Definitely taking this to an interview as one of my short ideas.
Those field interviews about moving inventory from warehouse to warehouse was like wtf; especially those 500k machines. I think the patent issue is very real and it doesn't really seem like they'll be able to force a new model on customers that uses a different patent cup. They've been really good about replacing machines out of warranty so unless they discontinue that, I don't see why anyone would upgrade from a working machine unless the cups were much cheaper; unlikely under a completely new patent.
Yea, the channel checks must have been sobering. It's incredible that shit like that can fly even in the age of PoS inventory management and 24/7 audits.
Stock was down -10% the day they announced it, and down another -15% today. Ouch
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