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Green Mountain shares plunge on Starbucks news

Shares of Green Mountain Coffee Roasters plunged in after-hours trading Thursday after Starbucks Corp. said that it will soon sell its own single-serve coffee brewer.
/ Source: The Associated Press

Shares of Green Mountain Coffee Roasters plunged in after-hours trading Thursday after Starbucks Corp. said that it will soon sell its own single-serve coffee brewer.

THE SPARK: Starbucks announced after the market closed that it will sell its own new device, Verismo, later this year. The move threatens Green Mountain, which is the market leader in single-serve, with its Keurig K-Cup machine.

THE BIG PICTURE: Starbucks said it didn't know the price for its new device and says its launch will not affect the café chain's relationship with Green Mountain.

The companies announced in November that Starbucks would make K-Cup packs of Starbucks coffee for brewing in the popular Keurig machine.

Starbucks said it can reach an even wider audience with the addition of its device, which it says fulfills a different consumer need.

Green Mountain sold 4.2 million of the Keurig machines in its most recent quarter alone. But the company faces hurdles as two of its important patents expire in November and other companies consider launching their own single-serve machines.

The market for single-serve is one of the fastest-growing niches in the coffee industry.

SHARE ACTION: Shares of Green Mountain dipped slightly during the day, falling $1.32, or roughly 2 percent, to close at $62.40 before the announcement.

The shares plunged $12.41, nearly 20 percent, to $49.99 in after-hours trading following the news. They have traded as high as $115.98 and as low as $39.42 in the past year.