Green Mountain Coffee Ousts Chairmen After Shady Share Sales
Stocks plummeted — again — for Green Mountain Coffee Roasters after it was announced that two chairmen, founder Robert P. Stiller and William D. Davis, would be stripped of their responsibilities after they sold shares and violated company policies.
The two chairmen allegedly sold shares in response to a margin call, meaning they had to sell off shares to set off the depressing value of the company. Explained the Wall Street Journal, the company sold off shares to keep a minimum balance in its accounts after taking out margin loans. Stiller and Davis sold some 5 million shares, or about $125 million, after the company's stocks lost nearly half their value earlier this week. The main problem: the company sold far fewer K-cups and brewers in the first fiscal quarter of 2012.
Green Mountain Coffee Roasters was founded in 1981 by Stiller as a small Vermont coffee shop. The company took off when it added K-cups to the lineup and acquired Keurig, but was hit hard by Starbucks' entrance into the single-cup market. In response to the company's demotion, Stiller was quoted as saying to CNBC, "I am really shocked and hurt... I’ve always been transparent with the board. I think it’s an overreaction." He also noted he did not break any regulations or laws with the sale. However, earlier today Stiller also sold off his $50 million worth of Krispy Kreme shares to deal with the current financial troubles.