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After rising steadily since hitting a low point last month, Green Mountain Coffee Roasters (Nasdaq: GMCR) has fallen off a cliff again in the last two days. Shares of GMCR are down 12% in early trading today after falling 11.6% on Tuesday. The stock is now trading at $44.07 – down 24% for the week and 60% in the last three months.
The latest decline for the Vermont-based specialty coffee maker comes on reports that the company is losing its grasp on the single-serve market it currently dominates. Green Mountain’s signature K-Cups, which comprise more than 80% of the company’s business, lost 0.4% of their single-serve market share in November.
That’s more bad news for a company that has suddenly fallen on hard times lately. It all started with a damning report from renowned hedge fund manager David Einhorn at the Value Investing Congress back in October. In a presentation our own Ian Wyatt attended and wrote about, Einhorn detailed his many reasons for short-selling Green Mountain Coffee, including an ongoing SEC investigation into the company’s accounting practices and the looming expiration of its K-Cup patents next September.
Within days the stock had plummeted by 17%. In early November the stock fell again, this time after its fourth-quarter earnings fell below analysts’ expectations. GMCR stock dipped all the way to $40.89 a share on November 10 – its lowest point since February – but had since rallied back up to $58.44 last Friday.
Now, it appears, Green Mountain Coffee’s stock is again in full-on tailspin mode.