Terranol A Short-Seller Collapse The Party
Case study：A short-seller crashed the party
The Terranola faced several problems at the time of this article. Primarily, the Terranola was attracted by Jeremiah Hughes, a well-known hedge fund manager and short-seller. He released navigation warning that the company is overrated. He revealed the company has unsold products and its patents about to expire, as well as other negative growth forecast, put the company into the market focus. These actions made share price of Terranola sinking and its facing a deepening financial crisis. To solve these problems and regain publics and investors trust, Terranola and its CEO will have to relinquish the idea of “doing one thing really well” (Kerstetter, 2003, p.2). In order to recover the share price …show more content…
Its product, the Express granola-bar-making machine, is on kitchen counters across North America, and market analysts suggest that household penetration of Express machines could triple. Now, the question is how should Terranola response Jeremiah Hughes’s accusations. Hughes was bang on his target and he identified the right company, his analysis was accurate and his prediction was perfect. Many big corporates has faced this situation - share value dipped in short term and the trading in lower valuation for quite some time and when the investors start seeing the real value of the company the share price increases and valuation rise again. So it is not a panic situation for Terranola but a great time to remodel its …show more content…
For years, the company has believed in only one product and one way of revenue generation–machine and plastic pods. The lack of new revenue streams has affected the long term growth of the company. To fix this problem, the company should try to acquire a sizable health food brand. Promote the package with its Express machine. Make some offers on new bar variety from the brand. Have a more cost effective custom build machine for the brand with a different size of plastic pods. This pod is smaller and much more cheaper sourced from new vendors. These would give Terranola not for defending 'Customer Loyalty' but achieved 'Competitive
The Terranola faced several problems at the time of this article. Primarily, the Terranola was attracted by Jeremiah Hughes, a well-known hedge fund manager and short-seller. He released navigation warning that the company is overrated. He revealed the company has unsold products and its patents about to expire, as well as other negative growth forecast, put the company into the market focus. These actions made share price of Terranola sinking and its facing a deepening financial crisis. To solve these problems and regain publics and investors trust, Terranola and its CEO will have to relinquish the idea of “doing one thing really well” (Kerstetter, 2003, p.2). In order to recover the share price …show more content…
Its product, the Express granola-bar-making machine, is on kitchen counters across North America, and market analysts suggest that household penetration of Express machines could triple. Now, the question is how should Terranola response Jeremiah Hughes’s accusations. Hughes was bang on his target and he identified the right company, his analysis was accurate and his prediction was perfect. Many big corporates has faced this situation - share value dipped in short term and the trading in lower valuation for quite some time and when the investors start seeing the real value of the company the share price increases and valuation rise again. So it is not a panic situation for Terranola but a great time to remodel its …show more content…
For years, the company has believed in only one product and one way of revenue generation–machine and plastic pods. The lack of new revenue streams has affected the long term growth of the company. To fix this problem, the company should try to acquire a sizable health food brand. Promote the package with its Express machine. Make some offers on new bar variety from the brand. Have a more cost effective custom build machine for the brand with a different size of plastic pods. This pod is smaller and much more cheaper sourced from new vendors. These would give Terranola not for defending 'Customer Loyalty' but achieved 'Competitive