It was just yesterday that we talked about huge put option buying seen in shares of Teavana Inc. (NYSE: TEA). As this was right on the heels of the Starbucks Corporation (NASDAQ: SBUX) merger announcement, the move was more than unusual. How many people can bet against a merger in literally the first 100 hours or so of a merger being announced? Still, put option activity was up through the roof.

Now we have a statement issued by Teavana calling out a short seller. The tea retailer said that a short selling group was touting severe pesticide levels in the company’s tea. This report on Seeking Alpha details the allegations. And of course the disclosure by the writer says clearly, “I am short Teavana.” We’ll leave it up to you as to the ethics about whether or not a short seller should be writing in public or using the media to promote their positions. Teavana is not the first effort of a short seller’s bash against a company nor will it be anywhere close to the last.

The short seller report on pesticides is published on Seeking Alpha with chart levels and more on the pesticides and basically said that this jeopardizes the Starbucks merger. Teavana’s statement on its teas conclude that its teas are safe and of the highest quality.

Teavana shares are down by about 2.8% at $15.00 on the day, under its $15.50 buyout price.

JON C. OGG

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