Market Commentary and Intraday News
Green Mountain shares fall after Starbucks rollout
240 days ago
(AP:NEW YORK) Shares of Green Mountain Coffee Roasters Inc., which pioneered the single-serve coffee market with its Keurig machines, fell Thursday after Starbucks rolled out its own brewer.
THE SPARK: Starbucks Corp. says that its Verismo can make lattes and other espresso-based drinks, in addition to brewed coffees. Green Mountain's machine only makes brewed coffee.
THE BIG PICTURE: Green Mountain, based in Waterbury, Vt., is the dominant player in the rapidly growing single-serve coffee market. But the company has faced numerous challenges in recent times, including the intensifying competition after the expiration of its patent on technology for its K-cups.
The company has also been targeted by a Securities and Exchange Commission inquiry into its accounting methods. Last month, it noted that its growth is slowing but that it still expects sales to increase by 15 to 20 percent next year
Starbucks' introduction of its brewer comes less than a year after it struck a deal with Green Mountain to make coffee pods for Keurig brewers. The companies say the two machines serve different customers and that they can co-exist. But investors aren't so certain.
SHARE ACTION: Green Mountain shares were down nearly 6 percent at $29.07; year-to-date, the shares are down 38 percent. Starbucks shares were up almost 2 percent at $50.90.
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