Shorts in Green Mountain (GMCR) Getting Nervous After Big Gains
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After a nice winning steak over the past few weeks, Thursday's surge in the market has shorts in Green Mountain Coffee Roasters (Nasdaq: GMCR) on edge.
Illustrating the roller coaster of emotions being felt by the shorts was the 6-plus percent surge intraday on very suspicious rumors the company is the target of a takeover. Also making the rounds is a rumor Starbucks (Nasdaq: SBUX) may be interested in acquiring a stake in the company. Once word hit, some were instantly running to cover and lock in the gains they've seen since David Einhorn presented his short thesis early last week.
Einhorn, for his part, is not likely sweating. He is sitting on at least a 30 percent profit, based on the price per share before he disclosed he was short.
In his presentation, Einhorn highlighted lower-than-expected earnings power, reduced transparency, negative free cash flow, surging capex and expiring patents.
A couple of pending items shorts are eagerly watching: 1. Starbucks K-cups will be launching in November; 2. Q4 results after the close on Wednesday, November 9, 2011.
Green Mountain shares are up 6 percent at last check.
Illustrating the roller coaster of emotions being felt by the shorts was the 6-plus percent surge intraday on very suspicious rumors the company is the target of a takeover. Also making the rounds is a rumor Starbucks (Nasdaq: SBUX) may be interested in acquiring a stake in the company. Once word hit, some were instantly running to cover and lock in the gains they've seen since David Einhorn presented his short thesis early last week.
Einhorn, for his part, is not likely sweating. He is sitting on at least a 30 percent profit, based on the price per share before he disclosed he was short.
In his presentation, Einhorn highlighted lower-than-expected earnings power, reduced transparency, negative free cash flow, surging capex and expiring patents.
A couple of pending items shorts are eagerly watching: 1. Starbucks K-cups will be launching in November; 2. Q4 results after the close on Wednesday, November 9, 2011.
Green Mountain shares are up 6 percent at last check.
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