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Keurig Green Mountain, Inc. Message Board

  • southbuckeye southbuckeye Nov 27, 2012 5:31 PM Flag


    squeezetracker: what is your take on what just happened and what would you suggest now?

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    • Looks like management went out of their way to punch einhorn in the face with results. As serious net longs, we love that. The story here remains unchanged and if you go back and read my comments and those of my partner, you'll see we called it just about perfectly (except we did not need the hedge offset). We will simply cover in that short as an offset against the long tomorrow and let our net long shares ride.

      We also expect that more unhedged short covering will follow tomorrow, but those who think the professional shorts are getting crushed here don't understand the realm of hedging. If einhorn isn't hedged with a pile of long calls, then he is as stupid as the gumps who have been ruining this board for months. We'd be surprised to learn einhorn didn't cover or offset hedge at least most of his position on the last drop below $25.

      Given the cliff noise today, it is still a sketchy market for all. I suggested my dad (he's 76) sell half of his position (modest at just 6k shares) at the bid a few minutes ago, and wait to see if it runs a bit higher tomorrow to blow out the rest. He came onto the shares in the low $20s shortly before the Canaccord conference.

      Again, the story is intact and that is great to support staying on some serious shares on here. That said, I think you may well get a chance to add some shares back cheaper pending more news about the sell through this quarter and seeing how things are going to play out into 2013.

      On the call right now they are talking about seeing retail prices drift down over the course of the new year... we think that is close to a certainty. We also expect them to make some progress on the bags and tiered pricing... margins will be lower than seen last Q there, too, but GMCR should do reasonably well holding shelf space and revenues should continue to grow, albeit at less than 20%.

      Think carefully and no hurry to sell here if you are long. We feel bad for the retail shorts family resources into the holidays getting creamed here tonight, but we tried to offer up quality, objective perspective here.

      p.s. Listen to the idiot rambling about margins right now on the call -- hey Mr Hong Kong, 5 years from now Green Mountain will have been acquired for at least $50. LOL

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