Shares of Green Mountain Coffee Roasters slumped 15 percent early Wednesday after it was disclosed that the Securities and Exchange Commission is performing an inquiry into how the company accounts for revenue.
Late Tuesday the Waterbury, Vt., coffee company said it received the request from the SEC's enforcement division. In a filing with regulators, Green Mountain said it believes the inquiry concerns its revenue accounting practices and its relationship with an unnamed vendor.
The company said it is cooperating with the SEC.
Mitchell Pinheiro of Janney Capital Markets said in a client note that he is comfortable with Green Mountain's revenue recognition policy. Still, the analyst said news of the inquiry would push the company's stock lower "and will create an overhang until the SEC inquiry is resolved."
Pinheiro maintained a "Buy" rating and said the likely stock price decline provides an appealing opportunity to purchase shares.
Green Mountain Coffee Roasters Inc. fell $5.63 to $31.38 when the market opened.
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