National Beverage Shares Dropped: What You Need to Know

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 investing thesis.

What: After putting their stock to bed at $15.12 last night, shareholders of National Beverage (Nasdaq: FIZZ  ) awoke to a nightmare this morning. In a world seemingly gone mad, their stock opened at $13 and change, and proceeded to plummet south of $13 within minutes.

So what: Exactly. So what?! Fools, you must chill. Nothing happened here -- or at least, nothing more alarming than the fact that National-B made good on its promise to pay out a $2.30 special dividend this morning. Take a $15.12 stock, subtract the $2.30 in cash it just mailed out to shareholders, and what you're left with is what investors woke up to this morning -- a stock trading at about $12.82.

Now what: So ... if nothing has changed at National-B, a Fool might be inclined to wonder why the stock has subsequently rocketed right back up to the $13 level and beyond? Are their rumors of a buyout afoot? Is PepsiCo still thirsty perhaps, even after drinking down Wimm-Bill-Dann (NYSE: WBD  ) two weeks ago?

I doubt it. Rather, my guess would be that this is a simple case of investors who overreacted on the one hand, placing short bets against the stock this morning, now realizing their error and closing out those bets. An increase in such "forced" buying would be enough to explain the stock's sudden uptick. But just like this morning's apparent sell-off, there's nothing behind this afternoon's rally.

Want to keep track of National Beverage's ups and downs? Add it to your watchlist.

Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy. PepsiCo is a Motley Fool Income Investor selection. Motley Fool Options has recommended a diagonal call position on PepsiCo. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.


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