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$0.02 (0.08%)
12:06AM (15 mins delay)
Oct 29, 2009 - 10:02 AM EDT
Diedrich Coffee’s (DDRX) stock has climbed in a manner that would lead a sheer chartist to assume the company has discovered a cure for cancer or created a perpetual motion machine. From its 52-week low of $0.21, the stock is up nearly 14,000% with nary a pullback. While it could be argued that today’s markets are no different than a casino, DDRX is a lottery ticket that may have serious manipulation and misrepresentation claims levied against it in the future. I am short DDRX and believe that the stock is worth little more than $8.00 per share. Further, in the investing public’s interest, I am sending a letter detailing my concerns on DDRX to the SEC.
I’ll assume that most investors understand that DDRX, which gets the vast majority of its sales from Keurig K-cups, has ridden the Green Mountain (GMCR) coattails over the past year. I’ll assume that most investors are aware of the pending Starbucks (SBUX) and Peet’s (PEET) K-Cup launches, which will likely destroy Diedrich’s market position. What I will assume isn’t known by those foolish enough to touch DDRX stock is the factual misrepresentation of core financials and the other warning flags from management that we have uncovered.
Source: Seeking Alpha (Oct 29, 2009 - 10:02 AM EDT)
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