Winners and Losers of the Week: Toasting Coke, Roasting Radio Shack
Companies can make brilliant moves, but there are also times when things don't work out quite as planned. From a deal that will let soda sippers make Coke products at home to a retailer taking its Super Bowl ad literally, here's a rundown of the week's smartest moves and biggest blunders in the business world.
Green Mountain Coffee Roasters (GMCR) -- Winner
Shares of Green Mountain Coffee Roasters, the company behind the Keurig brewing platform, soared 26 percent on Thursday after it revealed that Coca-Cola (KO) will invest $1.25 billion in it for a 10 percent stake.
The deal isn't just an investment for the beverage giant. Green Mountain is working on a new platform for chilled and carbonated beverages called Keurig Cold, and Coca-Cola will be offering up its brands as flavors.
This could be a game changer, and it comes at a great time since revenue growth has been slowing at Green Mountain.
RadioShack (RSH) -- Blunder
One of Sunday's most memorable Super Bowl commercials was RadioShack's spot that had Hulk Hogan, Mary Lou Retton, and other 1980s icons ripping apart an older version of its store. It was an admission by RadioShack that its concept had struggled to resonate with today's shoppers, but it ended with the refreshed makeover that the small box retailer hopes will win back consumers.
The ad was great, but now sources are telling The Wall Street Journal that RadioShack plans to close 500 stores in the coming months. If the company is so confident in this concept makeover, would it be closing hundreds of stores before it had a chance to work?
Apple (AAPL) -- Winner
Apple may have disappointed investors late last month by announcing weaker than expected iPhone sales, but it's putting its money where its mouth is.
CEO Tim Cook tells The Wall Street Journal that Apple has spent $14 billion on buybacks since the stock fell following that disappointing quarterly report. It's certainly a strong show of faith on the part of the company. Apple has bought back more than $40 billion of stock over the past 12 months. That's a Wall Street record.
A hungry Apple is one that should reward investors as future earnings get divided into fewer shares outstanding to pump up profitability on a per-share basis.
Social Media -- Blunder
Shares of LinkedIn (LNKD) and Twitter (TWTR) stumbled after posting quarterly results.
%VIRTUAL-article-sponsoredlinks%LinkedIn traded lower on Thursday night after offering up revenue guidance for the current quarter that fell short of Wall Street's target. Twitter shares tumbled 24 percent earlier in the day, fueled by weak engagement and user growth trends. Several analysts downgraded Twitter on the report, fearing that its growth may be peaking.
Neither report was terrible, but both stocks have been market darlings trading at lofty valuations. When you're flying at those heights, anything short of perfect can clip your wings.
Netflix (NFLX) -- Winner
Things keep getting bigger and better for Netflix. CEO Reed Hastings announced that Netflix is now serving 2 billion hours of content a month. It's a pretty big milestone. Netflix crossed a billion monthly hours less than two years ago.
February's going to be a big month for Netflix with the return of "House of Cards" for a second season next week. Netflix expects to close out the quarter with 48 million global subscribers, up nicely from the 44 million it had when the quarter began. The rich keep getting richer in the streaming realm.
Motley Fool contributor Rick Munarriz owns shares of Green Mountain Coffee Roasters and Netflix. The Motley Fool recommends Apple, Coca-Cola, Green Mountain Coffee Roasters, LinkedIn, Netflix, and Twitter. The Motley Fool owns shares of Apple, Coca-Cola, LinkedIn, and Netflix. Try any of our newsletter services free for 30 days.
