GMCR Stock Soars on Coca-Cola Equity Stake

by Kyle Woodley | February 5, 2014 5:25 pm

Green Mountain Coffee Roasters (GMCR[1]) was flying high after the bell Wednesday following the announcement of a 10-year collaboration agreement with Coca-Cola (KO[2]) that includes Coca-Cola taking a 10% equity stake in the Keurig parent.

The news sent GMCR stock as much as 45% higher in after-hours trading and also extended Sodastream’s (SODA[3]) losses, as SODA stock was down nearly 10% after Wednesday’s bell.

According to a release, Green Mountain and Coca-Cola will cooperate to bring Coke’s portfolio of drinks to the new Keurig Cold beverage system, which would be pitted against Sodastream’s line of soda-making machines.

GMCR will be Coca-Cola’s exclusive partner in the venture, and will produce Coca-Cola Company-branded single-serve, pod-based cold beverages. According to the release, Green Mountain and Coca-Cola “also will explore other future opportunities to collaborate on the Keurig platform.”

Coca-Cola will acquire 16,684,139 newly issued shares of GMCR stock for about $1.25 billion, or $74.98 per share, representing about 10% of Green Mountain shares after the creation of the new equities.

Following a cratering in GMCR stock spurred in large part by Starbucks’ (SBUX[4]) entry into the single-serve game with the Vue, Green Mountain shares have bounced back more than 300% off their 2012 bottom. That includes a 75% run in GMCR stock over the past 52 weeks.

Meanwhile, Sodastream has been limping in 2014, with SODA stock off 28% for the year-to-date before Wednesday’s late announcement.

KO shares were up about 1% in after-hours trading.

Kyle Woodley[5] is the Deputy Managing Editor of InvestorPlace.com[6]. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley[7].

Source URL: https://investorplace.com/2014/02/gmcr-stock-ko-stock-sodastream/

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