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Reuters Exclusive Interview with David Einhorn Discussing Green Mountain Coffee (GMCR.O)

December 21, 2011 | About:
Holly LaFon

Holly LaFon

258 followers
(Reuters) - Hedge fund manager David Einhorn is taking an even harder line against Green Mountain Coffee Roasters (GMCR.O), his big short trade, claiming a recent audit committee review of the accounting issues he flagged is nothing more than a "whitewash."In an exclusive interview with Reuters, Einhorn said he still doubts sales figures and spending plans at the company, which saw its stock soar to $110 in August on the rapid growth of its individual coffee servings or K-cups. When Einhorn revealed in October that he had been building a short position in shares of the company for weeks, the stock tanked and it effectively turned things around for his $8 billion Greenlight Capital fund this year.

"I think everything we said in the presentation is right now as it was then -- and in many cases even more so," said the 43-year-old manager, who runs one of $2 trillion hedge fund industry's better-known long/short funds and also is an accomplished poker player.

In the interview with Reuters, Einhorn blasted the company's audit committee for conducting a "whitewash" review of the concerns he raised in an October 17 presentation entitled, "GAAP-uccino." That presentation hit Green Mountain like a tidal wave, and has sliced the stock's value in half to around $46 as of Tuesday trading.

Einhorn's presentation seemed prescient and awoke traders to potential problems with Green Mountain's growth story. Green Mountain reported a massive earnings disappointment in November in another blow to investor confidence. The stock, which had been a favorite of many in the hedge fund set -- most notably John Thaler's JAT Capital -- now ranks as a popular short for managers.

Green Mountain spokeswoman Suzanne DuLong rejected the suggestion the company has given short-shrift to complaints about its accounting practices.

Continue reading the article and see the full interview here.


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