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Jason Merriam

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  • David Einhorn Overlooks Improvement At Keurig Green Mountain [View article]
    Jesse,
    It is thought Einhorn sold puts last year, but there is no evidence he covered this year. That said, he got scorched badly, but he might have used long calls or buy to open an out-of-the-money call some where along the line.

    As for KO investment allaying some fears: no offense taken, but KO's M&A team is a deep bench. They're pretty savvy deal makers and the incremental nature and timing of KO's "minority" equity stakes suggests an unwillingness to jump in with both feet.

    Interpret at will, but the books appear to have been scrubbed enough for a $2b wager, but fall well short of a controlling interest. If Einhorn's accounting concerns hold any merit, KO would also be smart to hedge their bet against the possibility of finding dirty laundry.

    Jun 24 04:02 PM | Likes Like |Link to Comment
  • David Einhorn Overlooks Improvement At Keurig Green Mountain [View article]
    On the matter of David Einhorn: Greenlight's original short thesis is far from a moot point, especially with respect to past accounting issues. Einhorn is, just as everyone else, aware of operating improvements vis-a-vis Brian Kelley / new management.

    Hard to know whether the short position has been covered, but if not, it is likely hedged. Einhorn will likely have something to say about the KO / GMCR deal going forward. Oddly, it would come as no surprise if KO's involvement with GMCR ends up breathing new life into Greenlight's bearish viewpoint.
    Jun 24 05:12 AM | Likes Like |Link to Comment
  • Keurig Green Mountain: A Page From Coca-Cola's Vertical Integration Playbook? [View article]
    duhaus,

    I appreciate you taking the time to read the article and the comment. The case laid out in the article considers the possibility that GMCR may have been in KO's cross-hairs long before these recent developments.

    Further, I consider that KO's stake is manifesting carefully in the sense that step-acquisitions are key to KO's playbook. All that is known for certain is that KO's average cost basis is in the $90 area. The article suggested that based on this information, GMCR's stock at current levels looks to be overvalued by 28%. Even more so by Friday's close in our view.

    Whether or not that translates to 28% "downside" risk, I certainly do not know, but absent any positive change(s) in the underlying fundamentals, there is significant downside risks to consider.

    Who knows, for all we know KO could come out in two weeks with a higher bid with the goal of taking a controlling interest. The thrust of the article intends to point out that KO may be the shrewder of the players here.

    GMCR is a stock which has defied gravity at times only to come crashing down other times. The simplest way to illustrate this is to look at a five year chart. Then tell me what you think. Hope this helps answer your questions.

    Jun 14 02:30 AM | Likes Like |Link to Comment
  • Keurig Green Mountain: A Page From Coca-Cola's Vertical Integration Playbook? [View article]
    R&C,
    Let us assume for a minute that Coke's M&A team is competent with their due diligence. That said, it may not be common sense to assume "cost" basis as an estimate of fair value, but our contention is that it would likely be based on "best available information".

    The point here is if Coke is going to invest $1.2b and another $1b several months later (and much sooner than most industry peers and analysts believed), then you have to consider many potential outcomes. Is fair value $90 as offered in the article? Who knows, but KO's expedited incremental purchases suggest that $90 assigns a reasonable point of valuation at this point in time.
    Jun 14 01:53 AM | Likes Like |Link to Comment
  • Keurig Green Mountain: A Page From Coca-Cola's Vertical Integration Playbook? [View article]
    jeffgra7,

    Daft: Prior to his resignation from GMCR's board in May 2012, he had been the most recent addition to the board, joining in late 2009. The timing of his departure is indeed curious, as of the 8 current directors in place at the time, 5 had been on the board since the '90's.

    Track record: The market has not agreed with our position in many but not all of our installments on the name. This stock does not nor has ever traded on its fundamentals. As such, we remain unabashedly less than sanguine on the company...and for the many issues discussed in this latest and previous coverage of the stock.
    Jun 14 01:36 AM | Likes Like |Link to Comment
  • Green Mountain Coffee: Will CEO Kelley's Previous SEC Issues Help Or Hurt? [View article]
    TWKT,
    Anything is possible these days. Consider another aspect to your not-so-make-believe scenario:

    Anybody who puts the time and resources into a 70 page report is not doing so lightly. Further, to assume any negative report as complicit to a conspiracy is almost comical.

    Dec 3 01:33 AM | Likes Like |Link to Comment
  • Green Mountain Coffee: Will CEO Kelley's Previous SEC Issues Help Or Hurt? [View article]
    Nulhegan,

    Unlike most sell-side analysis, most GMCR shorts carry their own water.

    Nov 28 05:59 PM | Likes Like |Link to Comment
  • Green Mountain Coffee: Will CEO Kelley's Previous SEC Issues Help Or Hurt? [View article]
    philhers,
    Thanks for the comments. Sounds like you have done quite well with the low cost basis. Glad to hear you took some chops off the table opportunistically.
    Nov 28 05:35 PM | Likes Like |Link to Comment
  • Green Mountain Coffee Roasters: Restructuring The Ghosts Of Acquisitions Past [View article]
    Bernard,
    Interesting find, thanks. Kelley's previous experience with SEC investigations (incl. Wells Notice) makes it clear he knows the dance.
    It is also notable he jumped ship prior to SIRVA's bankruptcy.
    Nov 26 09:57 PM | Likes Like |Link to Comment
  • Green Mountain Coffee Roasters: Restructuring The Ghosts Of Acquisitions Past [View article]
    JohnDoeh,

    Think of returns on tang. assets as a variation of return on assets.
    Return on Assets = Net Income/Total Assets. Return on Tangible Assets replaces Assets with Tangible Assets in the denominator. So you need to be able to identify or calculate Net Income regardless of what's in the denominator. What are tangible assets?

    Tangible assets are (by my definition) Total assets minus intangibles.

    Your question might be "simple" but if you want to know the answer, you will need to do the math. Problem w/ GMCR is what they report as "net" income doesn't pencil-in to what is reflected in the balance sheet or statement of cash-flow. On top of that there are deferred items such as income taxes and accruals.

    Your scoffing ROIC as having no bearing with ROTA is mis-guided. ROIC is critical to determining economic value. It won't tell you where the returns were generated, but neither will ROTA if net income has been manipulated.
    Nov 16 05:04 AM | Likes Like |Link to Comment
  • Green Mountain Coffee Roasters: Restructuring The Ghosts Of Acquisitions Past [View article]
    scott128flying,
    Thanks for the comments. Agreed, cutting overhead is critical first step. However, improving the capital productivity picture and wringing efficiencies out of operating assets will necessitate reconciling the economic benefit of previous acquisitions...eventua...

    Oct 25 08:16 PM | 1 Like Like |Link to Comment
  • Green Mountain Coffee Roasters: Restructuring The Ghosts Of Acquisitions Past [View article]
    Mackay's Aug. purchase is now -18% lower.
    Oct 25 05:22 PM | Likes Like |Link to Comment
  • Green Mountain Coffee Roasters: Restructuring The Ghosts Of Acquisitions Past [View article]
    I can appreciate your past conundrum but admire your faith in the company. New management and leadership are critical to the future success of GMCR. Operationally speaking, this is the difference between night and day.

    However, before exploiting opportunity cost, one must understand the alternate to be forgone and the benefits that could have been received.

    Problem is, it won't be an easy decision unless the outcome was known. You can't take saved "opportunity cost" elsewhere until you know what is saved.
    Oct 25 04:53 PM | Likes Like |Link to Comment
  • Green Mountain Coffee Roasters: Restructuring The Ghosts Of Acquisitions Past [View article]
    SoyFiesta,
    "We", "our" refers primarily to myself, my research assistant and interns who participate in various ad hoc projects or assignments at my request either for MIR or http://bit.ly/1hgo0rb.

    Although I choose the topic and subject matter to write about, the assimilation of the information used is via input from the team, our archives or database.

    Seeking Alpha determines whether an article is worthy of publication but the views expressed are solely those of the author.



    Oct 25 04:29 PM | Likes Like |Link to Comment
  • Green Mountain Coffee Roasters: Restructuring The Ghosts Of Acquisitions Past [View article]
    tigerpac,

    Insiders sold 410,000 shares in connection w/ the secondary. A request for correction was submitted to the editors and it has been updated.
    Oct 25 02:30 PM | Likes Like |Link to Comment
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