The Rising Influence of Rising Affluence

[mrholty]

Einhorn considered them to be channel stuffing. I tend to believe him. If you look at the SEC inquiry from last year IIRC it stated that it could have been as much as $.06/quarter in gain. At the time they were earning $.10 so it was material at the time. Those topline growth number allowed the stock to grow at many multiples and allowed the company to use its stock to buy up other mfg plants allowing them a monopoly instead of using prescious cash. A good but risky move by them. Other than that I don't think Greenhorn thought it was a fraud.

IIRC, he is now long the stock. My wife recently became a convert to the Keurig and probably goes through 2-3 kcups a day. She loves the convenience with 2 small kids at home she can have a cup ready in two minutes vs her old steep. Add in its easy to do hot chocolate for the kiddos and its a winner in our house even though you pay something like $50/lb of coffee. I'm seeing them more and more in small business offices as well. I'm personally will buy some but not yet.

Anybody have any thoughts on the sodastream. I think they have their target market all wrong by being in Bed, Bath and Beyond and therefore have held off. They need to be selling in urban cities. When I lived in NYC I dreaded a walk of a few blocks from the Bodega with a 12 pack of Coke, a gallon of milk and a 6'er of beer. I replace the 12 pack of coke with a little bottle of syrup. Winner!

Their success in Europe has been in countries with extremely high taxes on either soda (sugar) - Sweden or high can deposit costs. Pepsi and Coke work very hard to slow that growth here in individual states as their consumption per person drops considerably.