Who to Trust on Green Mountain... David Einhorn or Starbucks? (GMCR) (SBUX)
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Recent comments from Starbucks (Nasdaq: SBUX) related to Green Mountain Coffee Roasters (Nasdaq: GMCR) may have shorts who followed David Einhorn into the stock reevaluating their positions.
Starbucks spent a considerable amount of time on Thursday's conference call discussing the premium single cup opportunity.
Starbucks said 30 million Starbucks K-Cups began rolling out of distribution centers and are already appearing on grocery store shelves across the country. Over 50 million are expected to be shipped by the end of November.
On November 1st, the company launched seven K-Cup SKU's, five in the Starbucks brand and two in the Tazo Tea brand.
Starbucks said the company is confident the K-Cup portion-packed business will grow to be greater than a $1 billion business over time.
Maybe more importantly, Starbucks said it has seen a significant increase in shelf space as retailers are dedicating more and more space toward premium single cup. The company sees premium single cup representing two-thirds of growth in the total premium coffee space. Starbucks sees "tremendous upside" in premium single cup. Starbucks said about 8 percent of households currently have a premium single cup machine in their homes. The company expects this figure to increase significantly over the next five years, doubling -- maybe even tripling.
So this is what Starbucks said. To get a refresher on what Einhorn said about Green Mountain, view his presentation here.
Shares of Green Mountain are down 24 percent since David Einhorn first laid out his short presentation at the Value Investing Congress on October 17th. However, shares are up 25 percent from the lows seen since that time.
Starbucks spent a considerable amount of time on Thursday's conference call discussing the premium single cup opportunity.
Starbucks said 30 million Starbucks K-Cups began rolling out of distribution centers and are already appearing on grocery store shelves across the country. Over 50 million are expected to be shipped by the end of November.
On November 1st, the company launched seven K-Cup SKU's, five in the Starbucks brand and two in the Tazo Tea brand.
Starbucks said the company is confident the K-Cup portion-packed business will grow to be greater than a $1 billion business over time.
Maybe more importantly, Starbucks said it has seen a significant increase in shelf space as retailers are dedicating more and more space toward premium single cup. The company sees premium single cup representing two-thirds of growth in the total premium coffee space. Starbucks sees "tremendous upside" in premium single cup. Starbucks said about 8 percent of households currently have a premium single cup machine in their homes. The company expects this figure to increase significantly over the next five years, doubling -- maybe even tripling.
So this is what Starbucks said. To get a refresher on what Einhorn said about Green Mountain, view his presentation here.
Shares of Green Mountain are down 24 percent since David Einhorn first laid out his short presentation at the Value Investing Congress on October 17th. However, shares are up 25 percent from the lows seen since that time.
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