Did This Margin Call Cost Green Mountain’s Chairman His Job?
Green Mountain Coffee Roasters (NASDAQ:GMCR) founder Robert P. Stiller was removed from his position as Chairman after a margin call compelled him to sell five million shares of the company valued at about $125.5 million. Apparently Stiller had taken out personal loans against his holdings in the company and the margin call was probably triggered after the sustained fall in its share price after its poor earnings report on May 2.
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The company termed the share sale as “disappointing” and claimed it was “inconsistent with the company’s internal trading policies.”
Until last year, Green Mountain was a darling of the stock exchange, but then found itself in the crosshairs of short seller David Einhorn, who raised questions about its accounting and capital expenditures.
Stiller’s outsized loans against the collateral of company stock have also raised eyebrows — as of January 26, he had pledged 12.6 million shares, almost 78 percent of his holding in the company, valued then at about $619 million.
He also appears to have made substantial profits on sales of Green Mountain shares — according to Equilar, an executive compensation data firm, Stiller generated about $216 million in profits from shares he sold between August 2003 and April 2012.
After the margin call, Stiller holds only 5.4 percent in the company. Did he, in effect, jump ship before the tide turned at Green Mountain?
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