Green Mountain's shares slumped almost 25 percent after analyst David Einhorn warned on Oct. 17 that the company's business model was weaker than most thought and that its accounting was suspect. Then, on Nov. 9, 2011, GMCR announced disappointing earnings results and skyrocketing inventory. On this news, GMCR's shares plummeted an additional 40 percent, from a close of $67.02 on Nov. 9 to a close of $40.89 on November 10.
Investors with losses exceeding $1 million who purchased GMCR common stock between Feb. 2, 2011, and Nov. 9, 2011, or who acquired stock as part of a public offering on or about May 5, 2011, are encouraged to contact Partner Reed R. Kathrein by calling (510) 725-3000, or by email at GMCR@HBSSlaw.com.
The focus of the lawsuit and the firm’s investigation is whether GMCR violated the federal securities laws by hiding or moving inventory. The filed class-action lawsuit alleges that GMCR manipulated its revenue reports and falsified sales orders, using its fulfillment vendor, Mblock, to store surplus product while materially overstating the company’s revenue. During the period of the complaint, insiders sold hundreds of millions of dollars worth of GMCR stock and raised more funds from public offerings.
“We spoke to a witness last year who made similar allegations that Mblock helped GMCR hide inventory. However, we believed those shenanigans were in the past. If indeed they continued at Mblock, despite the opening of an investigation by the SEC last September, then current management has more guts than we have seen since Madoff.” said Mr. Kathrein. “Obviously, if the allegations are true, there are employees and former employees who know more, and we hope they will come forward to assist us in our investigation.”
Investors who desire to move to be a lead plaintiff in the class action litigation have until Jan. 30, 2012 to do so.
| SHARE: |
|
| CONTACT US | CYCLING TEAM | TERMS AND CONDITIONS | FIRM BROCHURE | SECURITIES BROCHURE | FOLLOW US ONLINE: |
|
|
|
|
|

