GAAP-ucino Version 1.5 – GMCR

GAAP-ucino Version 1.5 - GMCR

The following is from my friend who has a short position in GMCR:

Rather than bore you with yet another (recycled) Green Mountain Coffee Roasters short thesis of David Einhorn’s original GAAP-uccino, the attached presentation, “GAAP-ucino Version 1.5”, details two fresh, underappreciated reasons why GMCR is a strong sell, with an initial price target of $15.00/ share (currently trading for around $53.00/share).
Note that this report is 39 pages long, and is part I of III. The complete report will likely be at least 110 pages long. Please distribute and discuss freely.

These experts’ (crime fighters) many concerns sound as if they come straight out of a Harvard Business School
Case Study:

  •  Accounting/Fraud Issues: Overstating Revenue,Understating Expenses, Capitalizing Expenses, Channel Stuffing, etc. all to meet Wall Street Estimates
  •  Improper Conduct/Violation of Laws: Violations of Regulation FD, Insider Trading, Securities Fraud, Peculiar relationship with quasi-captive distributor, etc.
  •  Fundamental Problems: Zero cash flow since Keurig Acquisition, 100% dependent on external capital, Abysmal earnings quality, reliance on acquisitions to meet/beat expectations, Reduced/changing transparency of operating metrics, Patent expiration, etc.

GAAP-Uccino 1.5 – Part I of III – 2012 02 01

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