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Hedge Funds Sitting On $1 Billion Loss As "Most Hated Name" Keurig Acquired At 78% Premium For $92
As one hedge fund favorite long crashes (Chipotle is down 9% in the pre-market), so another hedge fund favorite short is about to spike (once it reopens for trading). JAB Group has decided that now is the time to offer a 78% premium to current prices to buy Keurig Green Mountain for $92 (note that is still down over 40% from its highs a year ago). The stock is currently halted at $51.51 leaving the 12% short interest biting their nails at the prospect of major losses and a good 'volkswagen-ing'.
- *KEURIG GREEN TO BE ACQUIRED BY INVESTOR GROUP FOR $92/SHR IN
- *KEURIG GREEN TRANSACTION ISN'T SUBJECT TO A FINANCING CONDITION
- *KEURIG GREEN MOUNTAIN TO REMAIN HEADQUARTERED IN WATERBURY, VT.
- *KEURIG GREEN OFFER REFLECTS PREMIUM ABOUT 77.9% ON DEC. 4 CLOSE
CMGR will re-open at 830ET
And the biggest loser, if only on an intraday basis, may be David Einhorn who famously reshorted GMCR in October (after having closed out his short initially placed in 2011 which he covered what was "ultimately an unsuccessful short") of this year, and as he wrote in his Q3 letter, "the second time has been a charm as our original thesis is playing out. So far, our third biggest winner this year."
That is alas no longer the case following today's 70% rip. The good news: with a basis of $102, Einhorn is still in the money. The bad news, for a hedge fund all that matters is daily P&L so add even more pain for Greenlight which through November was said to have been down over 20% YTD.
But it is not just Einhorn: as Markit notes, hedge funds are now nursing a $1 billion collective loss as a result of the massive short interest:
@zerohedge Hedge funds sitting on a $1 Bn loss this morning after $GMCR takeover. 8% of shares shorted pic.twitter.com/dkZh2OjzZK
— Simon Colvin (@Simon_MSF) December 7, 2015
* * *
The full statement below:
Keurig Green Mountain, Inc. (“Keurig Green Mountain”) (NASDAQ:GMCR), a personal beverage system company that has revolutionized the way consumers create and enjoy beverages, and JAB Holding Company (“JAB”) today announced that the companies have entered into a definitive merger agreement under which a JAB-led investor group will acquire Keurig Green Mountain for $92.00 per share in cash, or a total equity value of approximately $13.9 billion. The agreement, which has been unanimously approved by Keurig Green Mountain’s Board of Directors, represents a premium of approximately 77.9% over Keurig Green Mountain’s closing stock price on December 4, 2015.
JAB is acquiring Keurig Green Mountain in partnership with strategic minority investors who are already shareholders in Jacobs Douwe Egberts B.V., (“JDE”), including Mondel?z International and entities affiliated with BDT Capital Partners. At the close of the transaction, Keurig Green Mountain will be privately owned and will continue to be operated independently by the company’s management team and employees. Keurig Green Mountain will remain headquartered in Waterbury, VT.
Bart Becht, Chairman at JAB commented, “Keurig Green Mountain represents a major step forward in the creation of our global coffee platform. It is a fantastic company that uniquely brings together premium coffee brands and new beverage dispensing technologies like the famous Keurig single serve machine. Keurig Green Mountain will operate as an independent entity to ensure it will further build on its coffee & technology strength and continue to serve all its partners to the best of its abilities.”
Brian Kelley, President and CEO of Keurig Green Mountain commented, “This transaction will deliver significant cash value for our shareholders and offers an exciting new chapter for our customers, partners and employees by combining Keurig Green Mountain with JAB’s global coffee platform. JAB fully supports Keurig Green Mountain’s culture and values as we continue to pursue our commitment to deliver innovative beverage solutions for consumers at the touch of a button.”
“The Coca-Cola Company is fully supportive of this transaction,” said Muhtar Kent, Chairman and CEO, The Coca-Cola Company. “We have enjoyed a strong partnership with Keurig Green Mountain, and will continue our collaboration with JAB in order to capitalize on the growth opportunities in the single-serve, pod-based segment of the cold beverage industry. We look forward to working with JAB, an experienced operator with a successful track record of investing in and growing consumer companies.”
Irene Rosenfeld, Chairman and CEO of Mondel?z International, commented, “Keurig Green Mountain is a strategic asset that provides immediate access to the U.S., the largest coffee market in the world, and to on-demand, the fastest growing segment of the market. By leveraging our existing investment in JDE and not contributing incremental capital, we have the opportunity to diversify our participation in the global coffee category, while continuing to invest in our core snacking business to deliver significant value for our shareholders over the long term.”
* * *
And as one favorite hedge fund short surges, another hedge fund favorite long collapses...
It's going to be another tough month for the 'smart money'.
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Einhorn had a short position for a long while. Is he out of it?
JAB is stupid...if they waited another quarter they could have paid $45
It's just other people's money right?
Gofundme: I lost a million, please help!
This stuff gives me a chuckle, how can you take is seriously and put your money at risk when some asshat says things like:
"global coffee platform"
"...as we continue to pursue our commitment to deliver innovative beverage solutions for consumers at the touch of a button."
"...will continue our collaboration with JAB in order to capitalize on the growth opportunities in the single-serve, pod-based segment of the cold beverage industry."
This coffee business is going to be big. I see unlimited growth coming and I am willing to pay anything for it.
Just look at some of the deals we have been involved in. Just last week we led an investment into a single paper clip (the ones with the colored plastic coating) with a dried hunk of snot on the end of it for $2B!!!!
They will put them in cars so people can text, drive, and drink coffee.
Of course, and it will interface with your auto insurers' GPS tracking which interfaces with the NSA which interfaces with........
Sounds like thet're "disrupting" the entire coffee business.
If he wasn't he is now.
Is Ackman "the narcissist douche" short? It would be his end.
His short was just over $100 so if he still has it he still made money, but just millions not tens of millions. Poor baby.
They squeezed some shorts.
<Good to the last drop.>
"“Keurig Green Mountain represents a major step forward in the creation of our global coffee platform."
I thought the NWO was going to establish itself through Environmental Regulations, Health Care and International Trade deals but.... no. They're taking over though the coffee industry. Submit or you'll be half asleep until 11am for the rest of your life.
I think that's checkmate, guys. Time to admit defeat.
*Switches to Tea*
What a great buy. As soon as the world realizes they sell a machine for $200 that will make you an 8 ounce cup of corn syrup water for a dollar a cup, this company will be worth more than Google and GE combined. God Bless America!
When has Kramer ever been wrong?
In other news, I've seen SodaStream makers for <$60 at CostCo recently.
The Keurig does not make the coffee strong enough for me, period. Shit box.
Press it! Enjoy the grounds!
A French press is good but the Belgian siphon machine is more dramatic and I think makes the best coffee. Or go Turkish and just throw the grounds in boiling water and drink the lot.
Not gonna last. K cups have gone up in price by anywhere from 40-100% in the last 3-4 years. We are about to bag it, and we spend ~$100 a month on K cups.
pods
The coffee machine is a nifty gadget. I do like it, but the coffee costs more per cup than the Kona I buy from Trader Joes. Only way to justify the cost is if you compare to buying in a Starbucks.
We had one of those Peice of Shit machines at work. The display panel went out after less than 1 month. JUNK!!!
you are all a bunch of MORONS for buying this overpricd warm piss you think is so cool. You dumbies deserve to be ripped off. Taste test after test test show people pick McD and Dunkin Donut regualr over these froo froo she she fancy shmancy blends every time. Oh right, you think you look cool walking around witht the cup that says LOKAT ME THE MORON WHO OVER PAID FOR SOME WARM PISS
And that is why this groupp took k-cup private, they know you idiots will keep over paying for your fake phony status symbol coffe. Millions in student loan debt, 8 year car loans living in your parent's basement, but heh You buy 5 dollar cups of warm piss. good money management, buddy.
Brew your cofffe at home for pennies, pour it in a stupid starbucks cup and no one will know the difference. impress your fake freinds and save money doing it.
The new machines only recognize the RFID k cups.
No off brands for you.
Fer real? RFID chips in fucking K-cups?
Just put the brain implant in me now. I think I'm ready.
You haven't got yours yet?
I got a twofer with my flu shot.
And your consumption info is sent directly to your doctor and insurance company. Too many cups and the rates increase.
Not RFID. They use unusual fluorescent inks. I figured it out for one of my customers over a year ago.
"Not gonna last. K cups have gone up in price by anywhere from 40-100% in
the last 3-4 years. We are about to bag it, and we spend ~$100 a month
on K cups."
Now you can have your Keurig and your favorite coffee too.....all at a very reasonable price. Say goodbye to the high cost of K-Cups. Use a reusable filter and your favorite coffee and still enjoy the benefits of the nearly instant use brewer.
http://www.amazon.com/gp/product/B00C6PN482?psc=1&redirect=true&ref_=oh_...
Mrs. Cog and I use this brand of reusable filter and are very happy. Mine is used 3-4 times a day and has been going strong for nearly a year. The key is not to bend the cap back beyond 90 degrees while cleaning.
We have not upgraded to the new machines and don't intend to. We have several new old machines in storage for future use.
Yup. we've got one in storage too.
Makes a fair cup of tea, but not the boiling temperature I really like.
here's a workaround for the new stuff though:
http://hackaday.com/2014/12/10/dead-simple-hack-allows-for-rebel-keurig-...
I thought the person above was joking about an RFID chip in the K-cups for the new machine. Too funny. But it makes sense Green Mountain would make an effort to protect their brand and sales of k-cups.
Reusable filters for the original Keurig abound. Here is a cheaper brand. I know nothing about these filters. The weak spot on reusable filters is the plastic hinge for the top. The Ekobrew brand seems to have a very durable hinge. Don't know about the filters below.
http://www.amazon.com/Generic-Coffee-Filters-Compatible-system--Reusable...
I tried the one that came with it, just wasn't the same. I saw the ones that actually are like the pods but never bought them. Might have to try since Newmans went up to $49.99 at BJs for 80 cups.
pods
I think you will be happy with the reusable filters. Just don't overfill them. Break open a factory k-cup and you might be surprised how little coffee is actually in one.
I had a Keurig, but got rid of it in favor of a non-electric french press. It not quite as convenient, but so be it.
I bought one of those too! It works well but is not nearly as convenient. Whenever I get my panties in a wad about K cup prices, I will use the press for a while.
pods
After my second Keurig machine broke, I switched to the Bunn My Cafe. Comes with multiple brewing trays and makes a good cup of coffee.
I've been using the reusable filters now for a few years. I realized almost immediately that the per cup pricing was outrageous. I have moved on from the Keurig and onto this: https://www.amazon.com/gp/product/B00945SVP8/ref=oh_aui_search_detailpag...
Along with a nice burr grinder, a totally awesome coffee experience. I even brought one to work, so I don't have to drink the diesel.............
Best upgrade to your coffee that you can make: burr grinder. If you can't swing the $$$ for an electric, this one works just fine:
http://amzn.com/B001802PIQ
Never bought into it myself. I drink too much coffee, so making a pot is no problem. Also, nothing like grinding it yourself.
And think of the toxins of coffee in plastic and then heat the shit up.
$92. lulz. wtg janet.
Found my next short. Spekaing of which, who remembers when DDRX was acquired by GMCR, which was actually an organized epic short squeeze perpetrated by GS
Anyone that's still short on a chart that looks like that exemplifies greed and deserves to be blown out of the trade.
It's amazing. Market keeps going higher. Yet everyone I seem to see who is always on the wrong side of the trade !#!##
Yea I can't think of anyone I know who says they're tearing it up in the stock markets, everyone is losing or just treading water it seems to me.
FYI, these machines are ok for the cup a day user. I have a regular machine for bad hangover days or guests. By your own overpriced shit.
...he who borrows (gmcr common) is a slave to the lender.
Rocky mountain coffee: Take a sock, fill it with beans, mash with hammer drop in very hot water. Steep. Enjoy.
Whose sock? You know, I don't wanna know.
That's how we used to do it in Guate.
Haven't had MRE issue in a while. Can you still shine a weapons carrier with it?
What kind of lunatic would base an entire hedge fund on rice burritos which make you bleed from your ass? For fucks sakes.....
http://www.amazon.com/Primula-Aluminum-Stovetop-Espresso-Coffee/dp/B001J...
this is a real coffee.
In other words: GMCR was going to zero and the executives wanted a really high platform to jump off.
Who pays 78% more than the closing price for a company who's value is plummeting to zero?
advising bankers who get a %
Umm... the problem is in the new KOLD product line... which Coke invested $2B in.
Which Bank arranged this backstabbing?
lemmings will always over pay for their supposed-fancy "look at me" coffee. Guranteed prices will go up and so will profits as morons REALLY over pay for their "status symbol"
oh look at me I waste 2 hours a day standing line at starbucks and pay over 20 or 30 bucks a pound to make my single cup at home, I am SOOOOO time and money conscious. But I'm part of the lemming in crowd so that's all that matters.
Boil bubble, toil and trouble.