This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Dumbest Things on Wall Street: Oct. 21

2. Einhorn's Coffee Clash

Hedge fund assassin David Einhorn scaled Green Mountain Coffee (GMCR) in front of a live audience Monday. Unfortunately for a few bullish analysts, he scaled it like a fish as opposed to a mountain.

Speaking at the 7th annual Value Investing Congress, Einhorn filleted the high flying maker of Keurig single-cup coffee machines in a 110-slide Powerpoint presentation titled "GAAP-uccino". Of course, the assembly of hedge fund managers who paid big bucks to hear Einhorn didn't wait until slide number two before opening fire on the stock, sending it down more than 10% by day's end to $82.50.

Aside from taking the company's financial disclosures and capital spending to task, Einhorn, who gained market-mover status by mauling Lehman Brothers in a similar manner, said that using one of Green Mountain's single serve cups "is a very expensive way to drink coffee at home."

Honestly, we're not sure about that particular contention unless he is comparing it to brewing up a pot of Chock full o'Nuts in dad's old Mr. Coffee machine. Nevertheless, it's hard to fault Einhorn's other calculations because you just know the man does his homework. And if bringing down Lehman was not proof enough of Einhorn's research prowess, simply check out the 40% drop in shares of St. Joe (JOE) since he proclaimed the Florida land bank a short candidate in a 139-slide presentation at last year's conference.

Right now the big loser on the other side of Einhorn's St. Joe trade is mutual fund manager Bruce Berkowitz, who has vainly (in both senses of the word) fought back by loading up on even more shares of the company.

In the case of Green Mountain, Einhorn's challengers include Akshay Jagdale of KeyBanc Capital Markets and Janney Capital Markets' Mitchell Pinheiro, both of whom defended the company in research notes released Tuesday.

Jagdale reiterated his buy recommendation, saying that Keurig single-cup coffee machines will climb from around 8% of U.S. households currently to 22% by 2013, no matter how many slides Einhorn shows his hedgie buddies. And Pinheiro also reaffirmed his buy rating, while criticizing Einhorn for ignoring "factual evidence of strong market takeaway performance in the housewares and coffee categories."

Jagdale and Pinheiro also restated their price targets of $120 and $125 respectively for Green Mountain shares clearly steep climbs in the current environment for such a highly contested stock.

And while Einhorn may not win every contest he enters -- for examples, see Yahoo! (YHOO), New Century Financial and the New York Mets -- he does tend to create more than his share of losers, which is why Messrs. Jagdale and Pinheiro may want to have a coffee klatch with the company before this coffee clash with Einhorn boils over and burns them.

4 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,172.68 -107.06 -0.62%
S&P 500 1,994.29 -16.11 -0.80%
NASDAQ 4,527.6890 -52.10 -1.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs