Keurig Green Mountain Burns Its Short Sellers
For investors in Green Mountain Coffee Roasters, the events of Oct. 17, 2011, left a bitter taste. That’s the day David Einhorn—a hedge fund billionaire famous for sniffing out the rot in a company’s balance sheet—publicly ripped into the maker of single-serve coffee machines and the pods that go in them. Speaking to a group of money managers, Einhorn said there were questionable business practices, lax financial controls, and troubling stock sales by insiders. The company denied all of the allegations. Within a month, wagers that the stock would decline surged 85 percent, giving the company an enduring status as one of the most shorted stocks on the Nasdaq exchange. (Shorting is when an investor sells borrowed shares, intending to buy them back later at a lower price.)
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