Diedrich Coffee: A Web of Misrepresentations

11/8/09: This article has been removed due to the author's inability to comply with the terms of our policy on anonymous contributors.

Comments

[eggfaced:]

Good stuff...need to do some of my own DD but I love jumping on a falling knife. What brokerage do you use to short small caps? I can't short most stocks with a market cap under 1 bil with ETRADE.

Oct 29 10:54 AM

[Jackson Ame...:]

i know - tough at the discount brokers. best way is to have an account with a bulge bracket or another broker that has access to better short inventory. DDRX is somewhat tight, but you can definitely borrow it.

Oct 29 12:06 PM

[stink726:]

Interesting article; thanks

Oct 29 12:11 PM

[ukdaytrader:]

Joe Friday gave some excellent words of advice read here ;

"the market can remain irrational longer than you can remain solvent" .. I believe the quote is attributed to Bernard Baruch.

If you are going to short stocks, then make sure you have nerves of steel to ride out manipulation, or else allow for irrational price behaviour and be prepared to sit it out through margin calls.

Oct 29 01:01 PM

[fasttriguy:]

Your comment about Starbucks is absolutely inaccurate and not well-researched; Starbucks packaged coffee is distributed by Kraft, which owns the Tassimo pod system and contracts the hardware manufacturing with Bosch. It

Oct 29 01:17 PM

[DavidYou:]

A great article. It is amazing how a stock could become so overpriced.
You can short at TDameritrade.

Oct 29 01:22 PM

[Jackson Ame...:]

To the best of my knowledge the Starbucks relationship is not exclusive with kraft. While clearly viewing Keurig as a threat (and Senseo), there is nothing I know of that would keep them from joining Keurig if a license was granted


On Oct 29 01:17 PM fasttriguy wrote:

> Your comment about Starbucks is absolutely inaccurate and not well-researched;
> Starbucks packaged coffee is distributed by Kraft, which owns the
> Tassimo pod system and contracts the hardware manufacturing with
> Bosch. It

Oct 29 02:14 PM

[stocktoyou:]

"I’ll assume that most investors are aware of the pending Starbucks (SBUX) and Peet’s (PEET) K-Cup launches"

Where did you get this information or you just made it up. Post link please or you should be the one who shoud be reported to SEC.

Oct 29 03:29 PM

[Gil621937:]

Jackson:

Very interesting article--when will you send your letter to the SEC and why don;t you think other news providers haven

Oct 29 03:45 PM

[Timothy Sykes:]

Jackson what is your firm and how many shares are you short? Be transparent and I might respect you

Full Disclosure: your article made me buy 1,000 shares of DDRX today...your track record on other articles is horrific

Oct 29 03:49 PM

[Smarter tha...:]

Claptrap. Reading this is like reading a 3rd Grader

Oct 29 05:21 PM

[showmethe$$$:]

Having listened very closely to the DDRX conference call myself, I fully agree that much of this stock's appreciation has been due to "smoke and mirrors".

DDRX may be a perfectly good company, but there are countless GREAT companies out there whose stock prices reflect actual histories of sound performance.

This one is simply based on hope and a prayer. Like an inflated baloon, it will come back to ground level when the hot air cools.

Oct 29 05:36 PM

[coffeeguru:]

"I’ll assume that most investors are aware of the pending Starbucks (SBUX) and Peet’s (PEET) K-Cup launches"

And I'll assume you have credible resources to back up these incredible claims?

I know all these companies VERY well, and you are WAY off the mark which makes me question all your other premises.

Nov 02 02:46 PM

[Timothy Sykes:]

Nice job shortie, DDRX just got bought out at 25% premium after YOUR article caused the 25% drop, hope u covered and/or u have a good lawyer...silly little wannabe analyst

Nov 02 07:03 PM

[stocktoyou:]

"I’ll assume that most investors are aware of the pending Starbucks (SBUX) and Peet’s (PEET) K-Cup launches, which will likely destroy Diedrich’s market position"

Nice work, shortie! If you shorted in the teens, you can write off you loss then.

Nov 02 07:11 PM

[TMcNasty:]

PEET just bot DDRX for $26/sh. DOH!

Nov 02 11:35 PM

[stocktoyou:]

this jerk needs to be bring to the court for the lies he made up about "pending Starbucks (SBUX) and Peet’s (PEET) K-Cup launches".

Nov 03 07:33 AM

[stocktoyou:]

you are reported to the SEC for security fraud! Hope you have a nice day, idiot!

www.sec.gov/cgi-bin/en...

Nov 03 08:24 AM

[Timothy Sykes:]

Why did Seeking Alpha delete this author's bio and claim he's a new writer even though he's been writing for 2 years and Google Cache still has his old bio up? Interesting he's an analyst at a hedge fund, I wonder how many shares that hedge fund was short? did they cover based on this article? Shadddddy

Nov 03 08:49 AM

[MS:]

Reading this article for the first time today after PEET's move makes me somewhat confused. If your story has merit it would probably make sense to take a closer look at PEET. Either you are wrong or they are in way to deep. Any thoughts?

Nov 03 10:13 AM

[Jackson Ame...:]

I was very right about the desire of PEETs to move into K-Cups (that was the entire rational for the acquisition). I was very wrong on how they'd get there. I was short, which I disclosed, and I lost a lot of money yesterday, sadly, as there was no way I though PEET would give away 1/3 of their enterprise to buy their way into the K-Cup market. I was wrong.

Nov 04 08:34 AM

[stocktoyou:]

Jackson,

You've done very lousy job for being a stock analyst! Do you know how many licences that was granted by GMCR to sell K-Cups? Only 4! And all 4 of them have had long term relationships with GMCR through up-and-down cycles in the k-cup histroy. Did you honestly think that GMCR would destroy their own reputation to destroy their long-term loyality parterner DDRX's market position by granting PEET or SBUX k-cup licences? It would be suicide move for GMCR as well.


On Nov 04 08:34 AM Jackson America wrote:

> I was very right about the desire of PEETs to move into K-Cups (that
> was the entire rational for the acquisition). I was very wrong on
> how they'd get there. I was short, which I disclosed, and I lost
> a lot of money yesterday, sadly, as there was no way I though PEET
> would give away 1/3 of their enterprise to buy their way into the
> K-Cup market. I was wrong.

Nov 04 12:00 PM

[soapbox:]

give me a break....all of you haters out there....bottom line is fadish home coffee producer really worth paying 95x earnings to gain market share???? That's almost double the multiple GMCR is currently trading at....everyone is wondering about shorty here pushing the stock down from the $30 dollar level to the low 20's....funny thing no is commenting on how ddrx was stuck in the low 20's for several months after stalling in the mid 20's at the beginng of the fall and suddenly runs up to the 30's on no news...so much for chinese walls...who was the banker on this deal?? news of the pending deal was obviously out....if anything that 's where the SEC should be looking ...not at shorty here....Crazy thing here is Peets using it own overvalued currency to partial fund this deal...I agree with shorty Peets needs to be looked at more in detail for the short case....can't figure out way the PEET's stock has historically traded over is intrinsic value...disclosure no position in either...but believe both companies are grossly over valued....

Nov 04 09:51 PM