Green Mountain Roasted: 8-K Footnote Sends Stock Down 15% After Hours
For all those engaged in a repeat of the world's most ridiculous dash for trash, what just happened to GMCR may be a stark reminder that easy come may just as well mean easy go. The stock, which earlier closed at a fresh all time high, has plunged in the AH session after deep in the bowels of an 8-K just released, the firm disclosed the following stunner:
On September 20, 2010, the staff of the SEC’s Division of Enforcement informed the Company that it was conducting an inquiry and made a request for a voluntary production of documents and information. Based on the request, the Company believes the focus of the inquiry concerns certain revenue recognition practices and the Company’s relationship with one of its fulfillment vendors. The Company, at the direction of the audit committee of the Company’s board of directors, is cooperating fully with the SEC staff’s inquiry.
Could it be possible? A company that has ramped about 1,000% from its lows if not more, having done so on allegedly misrepresented financials? This will surely be the first time in history. And speaking of jokes, whatever happened to the SEC's inquiry into revenue recongition practices by Jim Cramer's theStreet?
One wonders just how many of the crappiest names that have managed to fool momentum chasing day traders for over a year, will be next to follow GMCR, which incidentally will be delighted to know that the recent bout of pseudo-hyperinflation in input costs will soon truncate its margins by a bit to quite a bit.