Monster Beverage (MNST) has been a very strong stock with good earnings and revenue growth. Coming into today, the stock was 65.53. It had a breakout on an upgrade on January 17 and has basically not looked back. Earnings are going to be reported this week or early next week.

In the middle of the day, the Wall Street Journal reported that Coca Cola (KO) is in talks to buy Monster Beverage. Now, I have no idea where the Wall Street Journal got these reports from. But I do know that Monster Beverage stock went from 64.19 to 83.95 within 10 minutes. And, of course they stopped trading for a few minutes in between.

For a few hours, it traded around. It went to 84 and came down to 75. And then something happened at 3:55 PM ET when stock was at 76.05. Coca Cola announced that they absolutely have had no talks whatsoever with Monster Beverage.

Simple as that. Or not so simple.

Coca Cola announced that they have a distribution relationship with Monster in many markets. They’re always in contact with Monster to maximize the value of their commercial arrangements. But they stated that they are not in discussions to acquire Monster Beverage.

Well, the stock closed at 65, down 52 cents.

What’s the point I’m trying to make? Well, first of all it was 76 at 3:51 PM ET and it 84 at 11:57 PM ET. The stock finished down about 20% from the highs.

First off, if you got caught in this and bought it. I have a recommendation. I would write the SEC and have them investigate who leaked such information for where the Wall Street Journal reported this, moving that stock. Because, there’s thing that journalists do not have disclose their sources. But I gather in lawsuits, something’s gotta give.

But here’s the lesson. Pick your poison. I mentioned this thousands of times on this show. Pick your poison.

I can understand that you want to make money getting caught up in this news. But you’re going to get hour head handed to you…not all the time, but a decent amount of time. You also need to know that the person who came up with this so-called “whatever” is going to jail if it’s found out that he traded on the information he gave.

And as I looked at the news from the Wall Street Journal, their article sure as heck sounded like they knew what they what the heck they were talking about. Very weird.

I don’t play these things. And I must tell you that have missed a few darn good ones to the upside. But I’ve missed a lot of darn bad ones to the downside.

I think the Wall Street Journal should be held accountable to some extent, but won’t be more than likely.

And I just don’t know what to make of things like this except…pick your poison. 


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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.


1 reply
  1. Avatar
    MarkT says:

    “I don’t play these things. And I must tell you that have missed a few darn good ones to the upside. But I’ve missed a lot of darn bad ones to the downside.”

    Sage advice. There is always the other side. The buyout rumors are horrible. Check out FIO, nothing but rumors moving that stock. Horrible sloppy chart. Too bad, because the company has an interesting product and story.

    Anyway, it’s articles like this Gary that keep me coming back to your site and your radio program. Thank you.

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