What doesn't kill you, makes you stronger -the story of Keurig.
by Chee Leng
Class action suits, legal actions that can bring a company to its knees was the kind of things Keurig faces in September to November 2010.
It has make some mistakes in its reporting of earnings (not too sure about the technical terms), and that has caused legal suits to be taken against the company.
The company that was once termed the world's second fastest growing business had a free fall. Its stock went from a high of USD$38 to a low of USD$ 27.00.
Many financial sites and advisers are recommending a sell for this particular counter.
Then, there are rumors of Nestle, Macdonalds and even Coca Cola wanting to buy over the companies, the most rampant would be the one involving Nestle.
In addition, there is the rumor of Starbucks going into the single serve coffee segment themselves.
All these bad news and class actions suits by right should have doom Keurig or Green Mountain Coffee Roasters, but the reverse happens.
With the legal suits coming in, the share pricing did not go down but went up.
By November 2010, the pricing was back to $35, not as good as its hey days, but not too far from it either.
My two cents is, if your business model is sound, and your integrity of doing business is ethical (honest mistakes), your business should survived any storms.
Keurig is in a thriving single serve coffee segment, I believe that was a honest mistakes and they are even progressing despite this wall of bad news (i.e. assisting Mr Coffee with their single serve coffee solution
They brought in additional business during this period and should be in a stronger competing positioning (i.e. competitor Tassimo just lost a big partner Starbucks).