Fidelity Loses Nearly Half A Billion On Green Mountain Implosion

Tyler Durden's picture


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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Wed, 05/02/2012 - 17:09 | 2392207 slackrabbit
slackrabbit's picture

Jim Chanos is vindicated again

Wed, 05/02/2012 - 17:11 | 2392215 maxmad
maxmad's picture

Looks like don't "follow the green line!"  or the Green Mountain!

Wed, 05/02/2012 - 17:20 | 2392251 Careless Whisper
Careless Whisper's picture

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.


Wed, 05/02/2012 - 17:42 | 2392310 Rockmann
Rockmann's picture

Buy the open? into those bailing due to margin calls and fund selling? 

Wed, 05/02/2012 - 17:59 | 2392345 Muppet Pimp
Muppet Pimp's picture


Wed, 05/02/2012 - 19:45 | 2392526 Careless Whisper
Careless Whisper's picture

@ Rockman

yup. buy the open.

scared money never wins.


Wed, 05/02/2012 - 20:02 | 2392556 zaphod
zaphod's picture

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?

Wed, 05/02/2012 - 22:03 | 2392784 Thomas
Thomas's picture

Comment omitted

Thu, 05/03/2012 - 08:17 | 2393294 ndotken
ndotken's picture

"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

Wed, 05/02/2012 - 18:39 | 2392421 whatsinaname
whatsinaname's picture

I lost money trying to short this possum.

Timing..very poor !!

Good to see it go red though.

Wed, 05/02/2012 - 17:27 | 2392272 Rainman
Rainman's picture

Looks like Larry " 0ne hundred percenter " Fink took a beating too. Condolences.

Wed, 05/02/2012 - 17:36 | 2392291 ihedgemyhedges
ihedgemyhedges's picture

I really don't see what the problem is.  Now, Fidelity's value fund can buy it.................................

Wed, 05/02/2012 - 22:24 | 2392819 Buck Johnson
Buck Johnson's picture

Herb Greenfield of CNBC is having a crazy day today. 

Wed, 05/02/2012 - 23:10 | 2392879 lamont cranston
lamont cranston's picture


Thu, 05/03/2012 - 07:10 | 2393238 lamont cranston
lamont cranston's picture

Ah yes, The Fiddletie Bank. Did it become TBTF? 

Thu, 05/03/2012 - 00:34 | 2393007 misterbear
misterbear's picture 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.

Wed, 05/02/2012 - 17:11 | 2392212 Let them eat iPads
Let them eat iPads's picture

Good to the last DROP.

Wed, 05/02/2012 - 17:10 | 2392213 AL_SWEARENGEN

Wasn't Greenspan just saying that stocks were cheap?  How did he know?

Wed, 05/02/2012 - 18:37 | 2392415 Saro
Saro's picture

Not enough "cocksuckers" in this post.

Wed, 05/02/2012 - 17:11 | 2392214 Lost Wages
Lost Wages's picture

My wife's 401K is held by Fidelity. Is it going to vaporize now?

Wed, 05/02/2012 - 17:12 | 2392226 junkyardjack
junkyardjack's picture

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...

Wed, 05/02/2012 - 17:16 | 2392239 Golden monkey
Golden monkey's picture

Your dick. Fidelity that can be trusted.

Wed, 05/02/2012 - 17:20 | 2392249 Cruel Aid
Cruel Aid's picture

Doesn't mean you own it. You have a few choices, right?

Wed, 05/02/2012 - 17:31 | 2392281 Likstane
Likstane's picture

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. 

Wed, 05/02/2012 - 17:52 | 2392336 EclecticParrot
EclecticParrot's picture

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.

Wed, 05/02/2012 - 17:11 | 2392217 youngman
youngman's picture

Well they will have Facebook to play with and hype in a couple of months off to bed kiddies....the momo play in this one is over...

Wed, 05/02/2012 - 17:11 | 2392218 mayhem_korner
mayhem_korner's picture



Them thar caffeine withdrawal symptoms might smart a bit.

Wed, 05/02/2012 - 17:11 | 2392221 max2205
max2205's picture

Coffee Bubble bursts....400 others to follow

Wed, 05/02/2012 - 17:20 | 2392247 midgetrannyporn
midgetrannyporn's picture

401 if you count gold.

Wed, 05/02/2012 - 20:10 | 2392567 Sam Clemons
Sam Clemons's picture

"Who could have seen this coming?"

Wed, 05/02/2012 - 17:19 | 2392225 Golden monkey
Golden monkey's picture

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.

Wed, 05/02/2012 - 17:13 | 2392231 max2205
max2205's picture

ah, I am pretty sure they are for the unwind.

Wed, 05/02/2012 - 17:15 | 2392241 midgetrannyporn
midgetrannyporn's picture

Fidelity is almost as bad as CALpers. They'll buy anything. Every single one of their funds is crap.

Wed, 05/02/2012 - 17:17 | 2392245 Dr. Engali
Dr. Engali's picture

That's the problem with too much money. There is nothing good to put it to work in.

Wed, 05/02/2012 - 17:32 | 2392284 RopeADope
RopeADope's picture

Jesse Livermore would beg to differ. Too much money usually leads to plenty of places to put it to work at very attractive prices.

Wed, 05/02/2012 - 17:48 | 2392323 Henry Chinaski
Henry Chinaski's picture

Let me sleep on it.

Wed, 05/02/2012 - 17:16 | 2392242 Dr. Engali
Dr. Engali's picture

Ouch 40% that'll make your asshole pucker.

Wed, 05/02/2012 - 17:21 | 2392254 HarryM
HarryM's picture

They sure smacked that bitch with a shovel - seems excessive

Wed, 05/02/2012 - 17:32 | 2392285 Zymurguy
Zymurguy's picture

No I think the exact opposite... time to change yer shorts after that drop.

Wed, 05/02/2012 - 18:01 | 2392352 walküre
walküre's picture

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.

Wed, 05/02/2012 - 17:16 | 2392243 Conman
Conman's picture

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.

Wed, 05/02/2012 - 17:21 | 2392255 BlueStreet
BlueStreet's picture

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.  



Wed, 05/02/2012 - 17:30 | 2392275 I should be working
I should be working's picture

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...

Wed, 05/02/2012 - 17:22 | 2392256 junkyardjack
junkyardjack's picture

Looks like they built most of their position in late 2010 and early 2011

Wed, 05/02/2012 - 17:23 | 2392262 I should be working
I should be working's picture

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.

Wed, 05/02/2012 - 17:29 | 2392274 midgetrannyporn
midgetrannyporn's picture

They get theirs no matter what. Check out their new building! gRAPINg people is the amurkin way!

Wed, 05/02/2012 - 17:37 | 2392295 fonzannoon
fonzannoon's picture

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


Wed, 05/02/2012 - 17:47 | 2392321 junkyardjack
junkyardjack's picture

Its probably split across multiple funds, that's the manager level

Wed, 05/02/2012 - 17:37 | 2392297 ziggy59
ziggy59's picture

They've been decaffeinated

Wed, 05/02/2012 - 17:42 | 2392307 RopeADope
RopeADope's picture

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.

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