FORTUNE -- Traders have sent shares of Green Mountain Coffee Roasters (GMCR) soaring by 15 percent since opening Monday. The bid-up amounts to a huge sigh of relief: late Friday, the company announced that it would restate nearly three years' worth of earnings downward. But the total amount of the restatement comes to just $5.8 million, and the company blamed accounting errors -- not malfeasance -- for its 11 quarters' worth of erroneous financial statements.
But that doesn't mean Green Mountain's troubles are over - far from it. Some observers, including short sellers, thought the company's shares were overpriced well before Monday's runup, and even before the announcement in September that the Securities and Exchange Commission had opened an investigation into Green Mountain's "revenue-recognition practices with one of its fulfillment vendors."
Just a few months ago, everything was looking great for Green Mountain. Revenues and profits were soaring, as was the stock price, and the company was enjoying a growing reputation as a responsible corporate citizen. But lurking beneath all the good news was the simple fact that Green Mountain was about to face a flurry of competition that could take big chunks out of its industry-leading 36 percent share of the growing single-cup coffee market.
Found this extremely interesting because one of my clients - 1Quickcup.com is an online business that sells K-Cups. There are a ton of nuggets in there..particularly interesting was a section on the dispute between Starbucks and Kraft. According to the article, Starbucks, which currently provides coffee for Kraft's Tassimo machines,is going to start offering their own single serve machine.
While single serve coffee only makes up 7% of the coffee market, its share grew over 100% last year.