Did Green Mountain's founder make a mistake?
Robert Stiller sold a huge amount of company shares before news emerged of a threat from Starbucks.
The founder and chairman of Green Mountain Coffee Roasters (GMCR) sold more than $66 million in company stock before it tanked on a new threat from Starbucks (SBUX), Bloomberg reports.
Is this just a coincidence? Or is there something a little more suspicious here?
The move is significant because Green Mountain shares took a hit after Starbucks said it would release a single-serve espresso machine before the holiday season. Although Starbucks tried to portray its machine as different from Green Mountain's brewers, the market wasn't buying it.
So let's look at this a little more closely. Green Mountain shares plunged 16% on March 9 after Starbucks announced its machine, called the Verismo (Starbucks made the announcement on March 8 after the market closed.) Robert Stiller, Green Mountain's chairman, sold his stock on Feb. 15 and Feb. 24.
The $66 million question is this: Did Stiller know about Starbucks when he sold all that stock? If he had waited to sell until after March 9, he would have lost nearly $14 million.
Bloomberg asked the company, but Green Mountain wouldn't say when exactly it learned about Starbucks' plans. Starbucks said it told Green Mountain ahead of time, but wouldn't say when.
Stiller is on some thin ice here. If he did know about Starbucks' machine, selling would be a no-no. "It's something that the SEC would want to look at," a securities law professor told Bloomberg. "If he has inside information, he has to withdraw from the market."
We need to hear from Stiller directly. But he's already getting hammered in the court of public opinion. Twitter users are calling him a crook and suggesting his action is criminal.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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