Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our thesis.
What: Shares of Green Mountain Coffee Roasters were on fire today, climbing as much as 37% after the Keurig maker announced a surprise deal with Coca-Cola last night.
So what: Coke will take a 10% stake in the Vermont-based coffee seller, and the two formed a 10-year "global strategic partnership," which will make Coke's brand portfolio available for the soon-to-come Keurig Cold at-home soda-maker. Coke will also put the full weight of its marketing power behind the new product in an attempt to "bring the Keurig Cold beverage system to consumers around the world." The beverage giant invested a total $1.25 billion in Green Mountain at a per-share price of $74.98.
Now what: The partnership is a huge development for Green Mountain and the countertop soda-making industry. For years, Coca-Cola and other major brands have avoided licensing their products the likes of companies like SodaStream, which has been growing sales above 20% for several years, but that changed immediately with last night's announcement. The deal may also signify a transition in Green Mountain from a hot beverage seller to a cold one as sales have essentially flatlined after years of torrid growth. Still, the Keurig Cold is not set to hit the market until 2015, so investors will have to wait a while to see if the new partnership will make a splash.
Looking for more huge growth?
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.
The article Why Green Mountain Coffee Roasters Shares Soared originally appeared on Fool.com.
Jeremy Bowman owns shares of SodaStream. The Motley Fool recommends Green Mountain Coffee Roasters. It recommends and owns shares of Coca-Cola and SodaStream. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.