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Why New Age Beverages Stock Jumped Wednesday

By Daniel Sparks - Updated Oct 16, 2019 at 9:59PM

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After soaring 31%, the stock's rise on Wednesday moderated to 12%.

What happened

Shares of New Age Beverages (NBEV -5.66%), a company that sells ready-to-drink tea, coffee, kombucha, and energy drinks, jumped on Wednesday. By the time the market closed, shares were up 12%.

The stocks gain followed a tweet on Wednesday from New Age Beverages' official Twitter account stating, "The countdown is on. Big news coming from #Nestea."

A chart showing a stock price moving higher.

Image source: Getty Images.

So what

The news from Nestea, a New Age Beverages tea brand, was released shortly before market close on Wednesday.

"Nestea Instant Sweet Iced Tea Mix is back!" the company said in a follow-up tweet. "We are so excited to bring back this family favorite. After reading hundreds of messages asking for this staple product, Nestea USA decided they had to make Instant again!"

The news doesn't seem to be as impressive as investors were expecting. Shares had risen as much as 31% before the announcement. The stock's 12% gain by the end of the day, therefore, marked a significant step-down from highs achieved during the trading day after the first tweet was released.

Now what

Investors should remain focused on New Age Beverages' underlying business. While product news can undoubtedly be material, it's generally difficult to gauge the impact of products until New Age Beverages releases quarterly financial results.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Twitter. The Motley Fool has a disclosure policy.

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