This Day On The Street
Continue to site
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

The Five Dumbest Things on Wall Street This Week: June 15

2. Green Mountain's Morass

Look out below because Green Mountain Coffee (GMCR - Get Report) is going cliff diving.

Shares of the Keurig machine-maker spilled 8% Monday after grocery store giant Kroger (KR) announced it was planning to launch its own brand of single-serve coffee cups later this year that would compete with the Green Mountain-branded cups. The stock took another half a percent hit Tuesday to just above $21, a 52-week low, on the news that Safeway (SWY) would also be getting into the K-Cup game.

Anybody else want to jump into the coffee business while it's hot? Wal-Mart (WMT)? Target (TGT)? Bueller?

It;s becoming crystal clear that the single-serve marketplace will quickly become a free-for-all come September when Green Mountain's K-Cup technology reaches the end of its patent cliff. Private labels will pop up, prices will be undercut and hedge fund assassin David Einhorn, who famously shorted the stock, will add another notch on his belt.

Yep, from margins shrinking to Einhorn gloating, it's going to be a really rough climb for the folks at Green Mountain from here on out. And it certainly can't be easy for the company since its stock peaked at $116 last September.

"We might consider selectively two or three or four possibly private-label brands, store brands, as everybody in the room knows they typically operate with a value to the consumer. However, again we won't do them unless we think that they are profitable," Green Mountain Chief Executive Larry Blanford said at a conference last week.

Sorry Larry, but that's not exactly the most inspiring of game plans to turn things around. Even to fool the fools on Wall Street you'll have to think of something way smarter than that.

Meanwhile, Green Mountain spokeswoman Suzanne DuLong's isn't infusing much confidence in the company either. In response to Reuters questioning about the increased K-Cup competition, she told the news outlet to check its previous statements about Green Mountain's first-mover advantage and its institutional knowledge about manufacturing K-Cup packs.

Sure Suzanne, it's real, real hard to make a packet of coffee. If that's the case, however, why is every green grocer and corner deli getting in the game as we speak? Percolate on that why don't you.
4 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ZNGA $2.28 0.00%
BRK.B $126.56 0.00%
DMND $34.71 0.00%
GMCR $89.52 0.00%
JPM $57.75 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs