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Breakingviews: Coke's Einhorn challenge

Monday, Feb 10, 2014 - 02:54

Feb. 10 - Reynolds Holding and Jeffrey Goldfarb discuss the beverage giant's $1.3 billion Green Mountain investment in the face of the hedgie's big bet against the maker of coffee pods.

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Coca-Cola looks as if that's reprising a version of its famous jingle on singing in perfect. -- With hedge fund manager David Einhorn now the beverage giant. Plans to take a one point three billion dollar stake in green mountain coffee but I didn't -- is betting against the maker of beverages in a pot now Jeff. Six mark company why should we just trust that it knows what it's doing well so this is the survivors of the big story last week was the Coke was buying this this. 10% stake -- agreed not gonna help them -- pods for cold drinks decrepit home but the issue that sort of sort of came out as you thought about it for a couple days as it. There was big hedge fund guy David Einhorn who got famous for for charity release and brought it. -- knows what he's talking about any challenges management's. And sometimes and he had some some really skeptical of thoughts about green -- a few years ago it unusable but worried about their counting. On sort of skeptical about -- growth prospects -- still I think added to a -- -- It last October saying he's been losing net debt so far -- is -- he was right on initially renowned shares tanked. About 80% in this sort of I don't know months years after it came out this season in 2011. And he stuck with a they have recovered quite a bit of Coke deal added 30% to green -- so you have the -- return of Coke buying into you know -- to. You figure they -- gonna buy in and help this company would rather -- division probably done some senators Clinton and other examples of sort of -- like a cup let's see I don't got to -- -- little -- parental -- have in the market jumped 30% on this partly because -- you know probably great for green -- that -- and a bigger -- for -- but also probably thinking all right maybe some of these problems that have been nagging -- -- there is an SEC investigation. It's still going on you know two practices a green mountain so Coke. X comes in -- the stamp of approval but. We've seen Procter & Gamble do that too before they had -- -- to -- Pringles to chronicle diamond food that whole deal to felt they are because I don't returning well. You have because diamond turned out to have an accounting scandal at Hewlett-Packard said it during the product autonomy now so you pick -- if you packeting -- done due diligence must. Turns out there now believing autonomy for all sorts of accounting. Scandalous behavior and they had to write down almost three quarters that the so. You know it's not the market I think partly reacted to this but David. And the challenges -- do we know whether Coke is maybe the just we don't know where they are on the due diligence and it turns out they don't think -- -- -- -- -- but I -- it's -- such -- public. Thing that. We came out may be now so we're gonna happen particularly assault but they'll have to wait and interest and stuff there will be following that in the meantime stay tuned for more breaking news tomorrow.

Breakingviews: Coke's Einhorn challenge

Monday, Feb 10, 2014 - 02:54

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