Green Mountain Rockets Higher on Coca-Cola Deal, While Twitter Tanks

The Dow finished unchanged, but Coca-Cola made big news partnering with Green Mountain to sell its drinks for home-brewing. Elsewhere, Twitter tumbled in its first report as a publicly traded company.

Feb 5, 2014 at 10:00PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Despite a slow morning, stocks battled back to finish the day nearly unchanged, as the Dow Jones Industrial Average (DJINDICES:^DJI) closed down 5 points or 0.03%, coming back from a 100-point deficit earlier in the day. The S&P 500 and Nasdaq, meanwhile, lost 0.2% and 0.5%, respectively. The day's economic reports were mostly in line with expectations, as an ISM Services report rated last month's growth in the category at 54.0, indicating a modest expansion, while the ADP's employment report said 175,000 jobs were added in January, even with expectations for the official report due out on Friday. Atlanta Federal Reserve President Dennis Lockhart also said earlier in the day that he expects the stimulus taper to continue in increments of $10 billion as it's begun and that it should be completed by the fourth quarter. The comments may have shaken investors, as the Dow has already fallen 6% this year, and investors may have been expecting the Fed to make adjustments according to market behavior.

Elsewhere on the stock front, some major news rocked the beverage industry after hours today, as Green Mountain Coffee Roasters (NASDAQ:GMCR) said that it had entered into a long-term global strategic partnership with Coca-Cola (NYSE:KO), the world's largest beverage company. The news shocked the market, sending Green Mountain shares up as much as 55% and Coke shares up 2%. According to the agreement, Coca-Cola will make its brand portfolio available for the forthcoming Keurig Cold brewing system, and will put its marketing muscle behind the new soda-making machine, in whose success Coke now has its own vested interest. As part of the deal, Coke also took a 10% stake in Green Mountain for the cost of $1.25 billion, or $74.98 a share. The deal opens up a world of possibilities for the two companies, but it may be an odd move for a traditional competitor like Coke, considering that the Keurig Cold is not yet on the market and won't be available until 2015. Left out in the cold was rival SodaStream International (NASDAQ:SODA), maker of the leading at-home soda machine, whose shares fell 7% on the news. The development could, however, prompt PepsiCo or another soda-maker to partner with SodaStream in order to fight the Green Mountain/Coke alliance. In its earnings report, Green Mountain said per-share earnings came in at $0.96, beating estimates of $0.90, though revenue grew just 4% to $1.39 billion, falling short of expectations.

Also making news after hours was Twitter (NYSE:TWTR), which has been a market darling since its November IPO but fell sharply in its first report as a public company, with shares trading down 18% at the time of writing. Investors seemed concerned by sluggish user growth and flagging timeline views. Twitter said it averaged 241 million users in the quarter, just a 4% sequential bump, and timeline views actually fell sequentially for the first time, going from 159 billion to 148 billion. Those page views are what Twitter needs to sell ads. Those developments were enough to send the stock tumbling even though revenue jumped 116% to $242.7 million, well ahead of estimates at $217.8 million, and adjusted earnings came in at $0.02 a share, better than the $0.02-loss expected. With a sky-high valuation, the Twitter thesis is all about the future, and if page views aren't growing, the microblogging site could be in trouble. 

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Jeremy Bowman owns shares of SodaStream. The Motley Fool recommends ADP, Coca-Cola, Green Mountain Coffee Roasters, PepsiCo, SodaStream, and Twitter and owns shares of Coca-Cola, PepsiCo, and SodaStream. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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