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Fidelity Loses Nearly Half A Billion On Green Mountain Implosion
Fidelity is happy to announce it has an opening for a new consumer discretionary analyst, because the current one, the one who recommended the firm's investment in Green Mountain, is now looking for a job. Fidelity's GMCR position , which as of 3:59 pm amounted to $1.13 billion, was minutes later trimmed by $445 million, after the company finally posted earnings (and we use the term loosely) which may have finally validated the David Einhorn (and every single skeptic's before) thesis on the name. Because while the earnings themselves came in line, it was the forecast that buried the company: specifically, its forecast of $885 million in Q2 revenue on expectations of $971.7 million, $3.92 -$4.05 billion in full year revenue on estimates of $4.32-$4.46 billion, as well as its 2012 EPS which were forecast to come at $2.40-$2.50 while the street was looking for 2.631 EPS. The result: the growth thesis is now over, and the growth premium has collapsed, with the stock plunging by 40% after hours.
Below are all the other funds which will likely be on the lookout for a new "coffee" analyst:
And while Whitney Tilson professes to being short on CNBC, it appears the reality is that he has 100 shares of GMCR long, which he bought in Q4.... Nothing like a little Schrodinger Tilson.
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Jim Chanos is vindicated again
Looks like don't "follow the green line!" or the Green Mountain!
I'll give props to anyone who was able to hold a short in green mountain. That stock moves like kingda ka at six flags. The trade for now is to probably buy the open tomorrow and keep a tight stop loss. Alot of shorts may want to take profits and cover tomorrow. Who knows.
Buy the open? into those bailing due to margin calls and fund selling?
SSDD
@ Rockman
yup. buy the open.
scared money never wins.
Whatever, $445M is what? 8 hours of FED/Treasury debt money creation.
These guys create a billion dollar everyday out of thin air, what should they care if they lose half a bil?
Comment omitted
"Buy when everyone else is selling ... sell when everyone else is buying" ... those people, including me <smile>, that bought in the low $28's have already made 7.5% overnight on their investment
I lost money trying to short this possum.
Timing..very poor !!
Good to see it go red though.
Looks like Larry " 0ne hundred percenter " Fink took a beating too. Condolences.
I really don't see what the problem is. Now, Fidelity's value fund can buy it.................................
Herb Greenfield of CNBC is having a crazy day today.
ADMIT TO BEING THE STOOOPIDEST PERSON ON ZH. WHAT THE HELL DID FIEDDELTIE THEY MAKE/SELL? GOOD FOR FIDELTIE PRODUCING, WHICH IS WHAT ARCHIE BUMKER CALLED DEM
Ah yes, The Fiddletie Bank. Did it become TBTF?
Dryadresearch.com had been bearish on this and seemed like they had called out the channel stuffing of the SBUX cups. Company was a pile. My best short thanks to these guys.
Good to the last DROP.
Wasn't Greenspan just saying that stocks were cheap? How did he know?
Not enough "cocksuckers" in this post.
My wife's 401K is held by Fidelity. Is it going to vaporize now?
They are transfering over her funds to help keep the company afloat. Don't worry though the money is safe, they are going to make it back on some great opportunities out in Europe...
Your dick. Fidelity that can be trusted.
Doesn't mean you own it. You have a few choices, right?
Your wife's and everyone else's 401k is really just vapor anyway. Anyone still in paper will be rewarded with that vapor exchange soon enough.
I wouldn't worry, as the sad thing is -- if I've done the math correctly -- $450 million is a drop in the bucket of their $1.36 Trillion (yep, that's with a "T") under management, less than 0.03%, so while it looks like the commissary at their Boston headquarters just got stuck with a 4-year supply of blueberry hazelnut k-cups, the impact is similar to Soros dropping a mug on the linoleum -- which is precisely why they don't give a shit.
Like most money (mis)managers, they intentionally make contrarian "calls" on high profile, CNBC-discussed stocks so that, in the rare event they're correct, they get free guest spots on Fast Money for 6 months to self-congratulate and plug their firm. Sons-of-bitches.
Well they will have Facebook to play with and hype in a couple of months now.....so off to bed kiddies....the momo play in this one is over...
Them thar caffeine withdrawal symptoms might smart a bit.
Coffee Bubble bursts....400 others to follow
401 if you count gold.
"Who could have seen this coming?"
One year ago, I told the "roasters" that they will end up roasted soon enough.
Only the gold market was listening though. Paper is better than solid gold, dumbitchez.
ah, I am pretty sure they are hedged...now for the unwind.
Fidelity is almost as bad as CALpers. They'll buy anything. Every single one of their funds is crap.
That's the problem with too much money. There is nothing good to put it to work in.
Jesse Livermore would beg to differ. Too much money usually leads to plenty of places to put it to work at very attractive prices.
Let me sleep on it.
Ouch 40% that'll make your asshole pucker.
They sure smacked that bitch with a shovel - seems excessive
No I think the exact opposite... time to change yer shorts after that drop.
Somebody waited for the report and SOLD. That's the point. Someone cashed in and used the report release as cover.
This will not be an isolated incident.
Tisk tisk, no one listened to that crazy eddie guy. Rememebr reading his review of gmcr's financials and comparing it to crazy eddies operations.
How many companies now sell k-kups, 10, 20 30. All fidelity had to do was go to a store that sells coffee and just look at the shelves.
Yup with no customer loyalty and a product with no comparative advantage the growth story wasn't gonna last. Pretty soon SBUX and everybody else will be selling single serve coffee makers. But don't let that stop anyone on Wall St from extrapolating a trend.
But 40%, wow...
Looks like they built most of their position in late 2010 and early 2011
And again I think to myself: who buys this shit?
And the answer comes to me: some douche at Fidelity.
Must be tough losing other people's money.
They get theirs no matter what. Check out their new building! gRAPINg people is the amurkin way!
Which of their funds has a big position in gmcr? I did not see it in the top ten holdings of their consumer discretionary fund
Its probably split across multiple funds, that's the manager level
They've been decaffeinated
This is what happens when management is not qualified to run a business and is unable to evolve into corporate leaders. They end up bringing in outsiders that are not vetted properly.
Check out GMCR Director Douglas Daft's previous encounter with the SEC on falsifying sales when he led Coca-Cola. Fortunately, he sits on Wal-Mart's board of directors as well so should be able to escape any criticism of enabling corporate wrongdoing as that company has such a stellar track record.
Management has got nothing to do with this.
The stock was overbought and hyped up with Uncle Ben's unlimited cash put.
If you're trying to disqualify the management based on their revenues which came in pretty decent considering everything involved, than you might as well disqualify the whole lot.
Just wait.
Yes...I am sure that management had nothing to do with stating that GMCR's target market was 90 million households when a pareto analysis produced a more reasonable target market of 17 to 18 million MAX (14M with least cost effort). I am also certain that management believing that they could fund their expansion by capitalizing COGS for a long period of time because their target market was 90 Million also has nothing to do with the recent cashflow problem as GMCR approaches the 14M unit limit on easily obtainable brewer market.
And you are entirely right that Bernanke is 100% to blame for all corporate fraud that goes on in America. After all, forcing corporate executives to return shareholder paid-in capital after outright theft on their part is such a bad practice that we need to blame someone else.
You are also quite correct that management sheep are the same as management wolves-in-sheep-disguise if you meant to say that no corporate managment should ever be held accountable for their actions.
Did you mean to say...."Just wait, this time is different?"
You're making it sound like the company is a scam. Their revenue projection was off by 10%. Big deal. It's a projection. That doesn't amount to a 40% stock price correction unless someone cashed in their chips .. in the dark of the after hours.
Again, the management may not be stellar (who is?) but the company still generated 4 billion in revenues.
The stock was pumped up by Ben's funny money and the rigged HFT bull shit. Hence my conclusion that AMZN, CMG, GOOG and others are going to follow soon.
There is a much deeper message in this sell off.
The blowup of this company has nothing to do with the Fed or HFT. And i guarantee you that I can sell $4B USD of iphones by buying them at 200 and reselling at 100 so any analysis based on revenue alone is meaningless.
I agree that the FED and HFT are serious problems but blaming these for everything creates an environment where criminals of another kind can point the finger at those hot issues and shift blame from themselves.
oops.
How anyone still plays this game is beyond me.
GROWTH FUND OF AMERICA INC
6,269,956
Columbia Fds Ser Tr I-Columbia Select Large Cap Growth Fd
4,362,900
FIDELITY OTC PORTFOLIO
4,085,004
FIDELITY GROWTH COMPANY FUND
3,417,978
FIDELITY MID-CAP STOCK FUND
3,279,500
FIDELITY BLUE CHIP GROWTH FUND
3,260,765
Powershares Exhg Traded Fd Tr-Powershares QQQ Tr, Series 1
1,835,565
VANGUARD MID-CAP INDEX FUND
1,553,958
VANGUARD TOTAL STOCK MARKET INDEX FUND
1,552,026
FIDELITY MAGELLAN FUND INC
1,216,000
Aren't places like Fidelity just the holding company for investor's shares? This isn't actually Fidelity's money...is it?
Fidelity manages mutual funds which invest actively.
Tyler, you could put a serious dent in the HFT/MOMO games if you created a thread to track the most manipulated MOMO names (maybe CMG which is on a 6 month linear rise) and engaged your readership to track/document BS moves, particularly HF algo / option scalping. A little sunshine on a few of the most egregious plays might just help... Just a thought...
And isn't it just investor's money that is placed in the mutual funds? The important distinction I am trying to make here is Fidelity losing money vs. investors losing money. You can't argue with Fidelity and others terrible decision making with regards to where they place their money. Who is actually losing money though is much more important to me. Sure you can see long term effects like a loss in management fees and investors pulling out their money, but at this moment investors lost 40% and Fidelity lost a very small fraction of that.
Uh oh. I think what is, laughingly, referred to as my "retirement" funds are with Fidelity. So...
AND SO IT BEGINS
AMZN - CMG - AAPL - GOOG
OVERBOUGHT, OVERHYPED AND JUNK
Any more confirmation that the big boyz are cashing in their chips?
If you're still holding any of these at this price, YOU'RE DUMBER THAN DIRT.
HAHAHAHA. The hedgies are getting wedgies.
Holy jesus, CMG has a $20B mkt cap
"green" anything, just can't catch a break these days
green indusrty is an oxymoron
edit: ya, that's the vodka spelling :)
I was in Australia last month and picked up this little tidbit.
This " Green Mountain " deal was stillborn from it's inception! It cannibalized Starbucks sales. I get the multi branding idea!
The next time you indulge, think about this! Starbugs: Coffee chain Starbucks to stop using insects to colour food and drinks | News.com.au
They could go long on the sugar daddy dating fund maybe
One can get killed after hours in the mkt... how do I get in this Wall St casino.. looks like fun.
Want to get CREAMed with your coffee?
FMR is busy gambling billions more on CMG and LULU sporting multiples of 60+... But, it doesn't matter because it isn't their money. Never mind the MASSIVE insider selling in both companies in Q1. But, it is the Growth Company way -- very tight control of float for algos to squeeze shorts and profit on puts from retail investors who still think fundamentals should or do matter.
Retail investors will not come back to the market until the MOMO growth manipulation ends. Everyone knows it is crooked, even if the SEC never does anything about it...
Momentum Growth? Are you kidding me?
Folka on WS can continue to claim the market is cheap (which it is not if you take out the past 30 years of 401K net inflow induced multiple expansion which will now reverse) an infinitum. When people like my parents hear about CMG or LULU at 60X and more, they know the market is rigged and will stay out, to the detriment of many companies that are just doing the good old fashioned work of creating and capturing value...
I pisses me off because the market is now biased against true tech companies (bio, nano, semi) pursuing longer term but revolutionary technology. Once upon a time, those are the kind of companies that FMR Growth funds would have owned. Now it is f'in burrito and yoga joints. And, you wonder why the US is losing its competitiveness...
Re; Read your above post please? Then RSVP your thoughts. I wasn't disagreeing with you.
WA HAPPON!
Buy those dips! Well excpet this one..
Try this one instead! Use volume spikes to find bottoms!
Training Video: Stock Volume As Reverse Indicator http://stocklegends.com/technical-trading/stock-volume-as-reverse-indicator/
Didn't GMCR tank some 6 months ago? So it's tanked again.
And they want retail investors to put their money in the stock market. What a farce.
This coffee tastes like dirt.
Well, it was ground this morning.
GMCR just proves those who invest in corporations don't actually know anything about business. We have created nothing but a scam for wealthy insiders to steal money. Produce shit, hype it while borrowing money, leverage 1000x, cash out, and leave a rotting corpse behind.
Green Mountain's K-cup machines are pieces of garbage. A $10 Mr. Coffee Walmart special is built better. Most people who buy a Keurig machine are not stupid enough to buy another one after it breaks from three uses. The new $250 machine was probably produced for less than $5. I've never seen worse construction on a "premium" product.
The major revenue generator has als been killed off by the reusable K-cup insert that allows you to use your own coffee. Why pay over $.60 a cup for store bought crap when you can grind your own and use it in a single serve machine. The Tassimo machines are actually buil well and are far superior to Keurigs. The problem is Bosch is a well established company, unlike Green Mountain, and couldn't be algo gamed.
Keurigs are a fad just like bread makers in the '90s. Eventually people realize they are far more trouble than they are worth and just go back to what works. You can buy a quality single serve coffee maker for $20. Sure it isn't as easy but you save hundreds of dolars a month if you drink a lot of coffee.
The next to fall to a penny stock is Soda Stream. Guess what people found out. You can buy 5 gallons of Coca Cola syrup at Costco for $40 and use it with your SodaStream, if you were dumb enough to buy one of those as well. Hmm a pint of syrup for $8 that tastes like dirty dish water, or 5 gallons of Coke syrup for $40. What would you choose? Besides if home carbonators were going to be such a big business, don't you think Coke or Pepsi would enter the market and crush SODA?
Of course real market analysis is never done, becauze if any trader actually walked into a store they would probably never invest $1 in the stock market because they would see the blatant fraud first hand.
Heh. Up next -- the EPA is banning Soda Stream for the CO2, which, as every intelligent and sentinent non-denier knows -- causes OMG catastrophic global warming.
Next, the EPA will crucify beer companies for the same sin.
Your Guinness, however with its nitrogen bubbles, is safe from the EPA.
Disclosure: Long Diageo + 2 pints Guinness with dinner.
Fucking government morons. The other day Bloomberg reported how they're cracking down on the happy hour in NYC (don't remember why, but they sure know). Fuck them.
US Daily: 2012 US April Payroll Preview: Sluggish
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