In the past, when JAB Holdings gets invokved, the terms.of how long they go before paying their vendors sometimes increases. They may wait anywhere between paying for 60-120 days, whereas the currebt terms are 30 days. Since annual sales to GMCR exceed $60 million, this can be a big deal to a company without a cash hoard. If JAB increases the payout time from 30 days to 60 or more, JVA may not even want to be a supplier to GMCR.
However, though that would slash sales, the margins to GMCR are razor thin anyway and may actually even boost bottom line earnings. This is all speculation but Andy is simply stating the loss of GMCR as a possibility due to the unknown. For all we know, GMCR may actually increase their purchases from JVA after their sale is complete. Or, they may even buy JVA outright.
It was dropped 4% on 300 shares! Whoever's doing this and for whatever reason, they will keep doing it until the company finds a way to stop it or find some big buyers. There's no bottom as far as I'm concerned.
This is exactly the point I've been trying to make all along. JVA stock has been under attack since July when it was $5. Reuters has absolutely no interest in publishing an article about a measly $20 million company who may or may not lose this contract, especially with the stock already trading at a 50% discount.
This is part of a larger smear campaign against JVA to get the stock price down to make somebody rich. The CEO does not know how to respond to this attack so the stock price continues spiraling lower. Even after a good earnings report, all the gains were completely wiped out. The stock price started plunging hours before the Reuters article came out because they knew it was coming.
Any time the stock price moves higher, it is met with unusual sell volume and resistance. 2 days after soaring from $4.20 to $4.90 after GMCR was bought out at a 78% premium, the stock gave back all those gains entirely on extremely heavy sell volume that came out of nowhere on absolutely no news.
JVA is and has been under illegal attack for months to serve a greater purpose for someone to make them rich and you poor.
If I were the CEO, I would have issued a separate PR for the Walmart deal. It's the right strategy and builds shareholder excitement. Instead, he buries it inside an earnings filing and the value it should have added to the stock is completely wiped out. CEO may know coffee but he doesn't know how to handle analyst questions, inquiries from the press, and has proven over many years the inability to build shareholder value.
Of course, a languishing stock price gives his buyback dollars more leverage but no telling how many months/years will it take before the stock ever recovers. Short of another drought in Brazil, there is little that will move the stock higher, not even good earnings as just happened, especially if the CEO continues to bury good news in earnings PRs.
You really don't have a clue. First of all, "friendly" takeover doesn't mean they go out for beers together. It means it is mutually agreed upon and the shares are voted to the new buyer, and they don't have to buy on the open market. But that doesn't mean that the private equity firm providing the financing for this deal didn't buy a large block of shares and are using those shares to purposely lose money trading the stock lower to save many millions of dollars with a lower buyout price. And that is exactly what is happening here. It is relatively easy to do with a low float, low volume stock. I have seen it happen before and knew companies like this were being bought out way before the public did. That is exactly what is happening here,
Wrong! I never said it was a hostile takeover. It is friendly and the last update was on December 1st saying due diligence including reviewing audited financials was continuing. I said from the onset this could take up to a year and it's only been 7 months.
Even though the acquisition will be friendly, the manipulation to lower the stock price is illegal but JVA has refused to do anything to stop it.
This is all pretty meaningless. GMCR contract is signed thru 2017. This is like Reuters publishing a story that I'm concerned I might die in the next 10 years. Yeah, and I may not.
JVA has been under attack since July 2015 and now the media is being used against the company. No chance a positive article ever come out and say something about Walmart added JVA as a vendor. Likely someone will make a play soon to buy the company and are using every means at their disposal to trash the stock price to buy at the lowest price possible.
Besides, the GMCR contract provides razor thin margins so even if there is a loss of sales, it won't hurt the bottom line that much. That's why JVA is transitioning to private label coffee and tea to get higher margins, and WMT will help further increase margins selling their private label coffees.
Unfortunately, JVA is being run by a fairly incompetent CEO and has no clue how to increase shareholder value. This stock should be trading at $5 right now based on the latest earnings. He should know his company is under attack and learn how to generate positive press. Maybe Liolios Group is doing this in retribution for being fired? Anyway, somebody has had it in for this company for 7 months and is now using the media to do it's dirty work.
The ceo said that 3 days after earnings, the board of directors would start making inside purchases. He also said that's when the repurchase program would start back again.
Starting Friday or Monday, look for increased volume to the buying side for these reasons.
Despite plummeting oil prices, weakening currencies globally, falling commodity prices, one thing is constant.
People will drink coffee.
Even with very low coffee prices, JVA's cost of coffee also goes lower. They will likely remain profitable regardless of how low coffee falls. With the prospects of increasing sales starting in Q3 due to the addition of Walmart, and higher margins due to Teton Tea and cost cutting measures, JVA is actually a very good investment in a world of growing risk.
Here is what AAPL's CEO said last night:
"Our results are particularly impressive given the challenging global macroeconomic environment. We're seeing extreme conditions unlike anything we have experienced before just about everywhere we look. Major markets including Brazil, Russia, Japan, Canada, southeast Asia, Australia, Turkey and the eurozone have been impacted by slowing economic growth, falling commodity prices, and weakening currencies. Since the end of fiscal 2014, for instance, the euro US:EURUSD and British pound US:USDGBP are down double digits...The Brazilian real US:USDBRL is down more that 40% and the Russian ruble has declined more than 50%."
Yet, everyone will drink coffee.
Short interest has fallen as the price has fallen. Between July 15-31, trading changed and became manipulative. I saw it happening all over level 2. A switch went iff, that's abnormal. JVA has been under attack ever since but not by short sellers.
By the way, the stock buyback will resume on Friday and also expect to see larger than normal insider purchases. Starting on Friday or Monday at the latest, there will be a surge in buying interest.
There is reason to believe JVA is not only an acquisition target but is actively undergoing due diligence by the purchaser. They have incentive to squash the stock price which will save them apprix $10 million with a lower buyout bid. JVA has been going down for 7 months and my strong belief is the pending buyout is responsible for that. JVA should easily be trading at $5 based in this earnings report.
You mean other than the fact they more than doubled their profit from last quarter and increased margins significantly and expect that to continue in 2016?
How does a $20 million company landing a contract with one if the world's largest retailers be considered "meaningless"?