Was Green Mountain Coffee Roasters Too Hot for Einhorn?

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“Our coffee was too hot, our apple was bruised, and our iron supplements didn’t go down smoothly,” wrote David Einhorn to shareholders on January 22, describing Greenlight Capital’s fourth-quarter results.

Even compared to Apple’s (NASDAQ:AAPL) slide and a bearish bet on the iron ore supply, his stance on Green Mountain Coffee Roasters (NASDAQ:GMCR) turned out to be a particularly bad one. In the letter, Einhorn acknowledged that his short position in the company wrecked the hedge fund’s portfolio return for the fourth quarter.

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“The losses in the short portfolio were broad based; while the S&P 500 was down modestly in the quarter, our average short rose about 10%,” he said. “Green Mountain Coffee Roasters was the worst offender, with a 74% advance that wiped out our 2012 profits on the position.”

After his admission was made public, shares of the coffee company rose approximately 6 percent, as his error indicated that the company was better positioned that Einhorn had thought. Shortly after 2 p.m. Easter Standard Time, the stock was trading at $43.53…

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