Suppose Green Mountain’s Stiller Sold Earlier: the Perils of Leverage and of Being a True Believer

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Poor Robert Stiller, who had to cough up five million shares of Green Mountain Coffee Roasters ( GMCR ) to meet a margin call earlier this week. It seems the founder and visionary who popularized the Keurig coffee system got less than $25 a share for the stake he quickly liquidated.

Had Stiller been a little more cynical - about Green Mountain's prospects and about being the chairman and founder of a company with a hot stock - he might have earlier lightened his load and avoided the whole, embarrassing mess. Green Mountain shares spent the better part of a year above $50 and several months in the thin air above $75, at a ridiculous PE ratio and with the expiration of the Keurig patent looming. A sell signal if ever there was one.

GMCR data by YCharts

True, Stiller had sold stock earlier and at higher prices, but geez, what was he waiting for?

The insiders at First Solar ( FSLR ) did a nice job in recent years of lightening their positions, as the market woke up to the fact that subsidies do not make a sustainable business.

FSLR data by YCharts

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: investing , Stocks

Referenced Stocks: FSLR , GMCR

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