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Keurig Green Mountain, Inc. Message Board

  • squeezetracker squeezetracker Sep 6, 2013 2:55 PM Flag

    Why we hedged out at $88


    As noted here a few days ago, we sold out the trading shares and hedged the core long (offset short) above $88. We did that in part because of all the froth in the shares (evidenced by chasing discussed here and clueless #$%$ hyping things here they don't know anything about) and on the risk that carbonation won't be ready and announced Sep 10th meeting. Every other negatvie comment seen here as posted by dip S shorts is almost as lame as einhorn and his einhorning thesis we made fun of last year as the reason to go large here below $20.

    The bigger timing aspect is that If carbonation is ready, revenue and ebitda streams will be off to the races and so will the shares. We will join the RIP higher on heavy volume by rapidly covering and adding to the core long.

    If carbonation is NOT ready, the shares likely have another leg of this week's gentle pullback coming [sell the NO news] and our losses on the core long will be offset with gains on the short offset. We'd love to cover and buy more down in the mid $70s (again) prior to the news, but doubt we will see that barring something nutty re Obama blowing S up in syria or something the radicals do to re-celebrate their 9/11 mess.

    Unhedged shorts? They have been idiots on this story since $20/share and deserve to get clobbered.

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    • Unreal to thinl longs are thumbs down 4x on this post. My comments, read in chronological order, will seem to capital makrets savvy players as if we had the playbook going back to before einhorning even said or wrote anything about pressing his short and adding to the bet.

      Seriously people, get a grip here! If you think thumbs down on posts with serious analysis and comprehension, you are effd to understand why your position is being hammered.

      The stock is now mainlining to $60... einhorn is clearly gunning to break that down because then the target is back to the low $40s. We'll write about it in various forums when we think it is a buy again, but we have yet to cover in the residual short -- no compelling reason to do that anytime soon...

    • Update
      No carbonation so blew out the core long yesterday and covered in half the hedge offset within a point of the high. We think there are lots of momo dopes that need to come out of these shares now, and that the NYT article evidences that the einhorning crowd thinks they can play round three to the downside here.

      If we're right on the stock direction near term, we'll cover in the rest down a bit (say low to mid $70s)... but all is in flux after the "later much" carbonation news and those mushy 3Q inventory comments. We would love to see einhorn start blowing his sour horn just now. He can slam on the mushy 3Q comments, the nothing really new view, the one two or three years forward to carbonation or something else important to revenues, and add in that no one needs SS pod soup when noodles don't travel well through the Keurig machine's tip. LOL

      Altogether, yesterday was not a good news for an unhedged long here. Objectively, though, we would love to be able to buy the shares after one more big reset. When is einhornings short conference? LOL

      • 1 Reply to squeezetracker
      • 3 thumbs down? You do realize we have been a big bull and made exceedingly accurate calls on this stock, right? This latest leg down played out exactly as we suggested it would.

        Here's what I wrote on another thread here:
        squeezetracker • Sep 26, 2013 9:09 PM
        You got your "driving news" last week on investor day in NYC. Takeaways:

        1. The hype that carbonation rollout was coming soon was extended out 2-3 years.

        2. They plan to have new coffee, espresso and soup (LOL) brewers over time. They will even have spiffy chips in some to monitor who is using what selections/knockoffs.

        3. There will be some inventory adjustments and a few key customer orders will be softer than planned, but still the guidance is ok -- just not sandbagged for a stock juicing beat.

        4. More progress (cost reductions/operating efficiencies) to come from squeezing the manufacturing and distribution assets. This has been said before and meets with ywans from the street until the saves are meaningful and reported.

        5. More flavors and more sign ups from non-licensed k cup producers are hoped for... but don;t hold your breath that players like Peets will play ball.

        Wrapping all that up, the "driving news" has driven the stock down just like we suggested would happen unless the carbonation program was ready and announced on Sep 10th. Our initial guess was that we'd see the shares pull back from high $80s to low to mid $70s. As said on another thread, if if rolls down to $70, look oput below as there is a big, unsponsored gap all the way back to $61. We'll buy a bunch at $60... but based on the number of morons posting their long "analysis" here, there are more weak longs and momo morons in the stock than ever before. That speaks to further correction once the einhorning crowd decides to press this.

        The way things sit, we see no need to cover our short just yet... but I already shared that.

    • correction -- hedges blend to neutral just above $87 all-in.

142.05+2.12(+1.52%)Nov 26 4:00 PMEST

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