NEW YORK — The founder of Green Mountain Coffee Roasters Inc., who was ousted as chairman for a stock sale that violated company policy, said the transaction was triggered after he was caught off-guard by a swift drop in the coffee maker’s stock price.
Robert Stiller, who also dumped his $50 million stake in Krispy Kreme Doughnuts Inc., said in an interview Wednesday that he didn’t expect Green Mountain’s shares to fall so steeply last week. The decline forced him to sell the shares on a margin call, which happened to occur during a blackout period in which the company prohibits the sale of its stock by insiders.
Investors are subject to margin calls when they put a stock portfolio up as collateral to borrow cash. When share prices take a tumble and the value of the collateral drops, banks require borrowers to cover the gap.
Green Mountain, which produces coffee and the Keurig single-cup coffee maker, saw its stock lose roughly half its value last week after the company lowered its profit forecast due to slower sales growth. That followed a fall earlier this year after rival Starbucks Corp. announced plans to introduce its own single-cup brewing machine in time for the holiday season.
Green Mountain roasts coffee and makes K-cups in Sumner.
Stiller, who founded Green Mountain in 1981 and served as its president and CEO until May 2007, noted that he is retired and that his stock portfolio is his main source of income.
On Tuesday, Green Mountain said it was removing Stiller and lead director William Davis from their leadership roles and suspending their pay indefinitely because of stock sales that violated company policy. Both men had faced margin calls.