Wednesday, October 26, 2011

David Einhorn Has Crushed Green Mountain Roasters (GMCR)

A lot of former momentum high fliers have been trashed of late - Green Mountain Roasters (GMCR) is definitely near the head of the list.  The stock was actually holding up quite well during the majority of the swoon in the market late summer, early fall - but a short selling presentation by respected hedge fund maven David Einhorn a week and a half ago, crushed the stock.  It's lost about 40% of its value in that time. 

Here is the report if you are interested

David Einhorn's presentation on Green Mountain

I thought earnings were tonight and this potentially set up a very interesting risk reward as the stock is down over 40% in the past two weeks, but it appears the original date (which many services had listed as tonight) has changed.  I just called investor relations to check, and the recording says as much.  Expectations are extremely low - obviously. 

On the flip side, there are still massive gaps in the long term chart that eventually should be filled - one down at $45 and another at (gulp) low $30s.  But usually things don't move in a straight line.  We'll see how this one plays out.  But the 'momo' group has taken some serious hits this week.

No position

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