New Age Beverages Corp (NASDAQ: NBEV) is having a strong day in the market today, following up on the losses the company experienced yesterday as the result of an offering announcement. Is now the time to get involved? Today, we’ll talk about:
- What’s going on with NBEV;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
What’s Going On With NBEV
As the name New Age Beverages suggests, the company is a beverage company. It has seen some strong revenue growth over the past year, but it’s important to mention that this growth is the result of acquisitions, not necessarily incredible marketing techniques taking the company to the next level.
Lately, NBEV has been the center of attention for a couple of reasons. First, there have been rumors surfacing that Coca-Cola is interested in taking the company over. There has been no confirmation from either sides, but the rumor makes sense. Coca-Cola is a massive beverage company and New Age Beverages is a smaller fish in the pond hoping to come up. Also, Coca-Cola has been rumored to be interested in cannabis-related drinks and NBEV shares the same interest.
That’s another big kicker that has led to excitement around New Age Beverages. The company will be unveiling its like of CBD-infused drinks at a cannabis show relatively soon. The cannabis market is growing and investment interest in the market is doing the same. So, with cannabis-related drinks coming to the table soon, NBEV has the opportunity to tap into an emerging market that could be a massive one.
With the recent gains, NBEV decided to cash in, announcing a $50 million offering yesterday. The stock tumbled as the company cashed in, but it may not have been a bad idea. The company is unviling a new line of drinks, and thanks to the acquisitions it moved forward with recently, it doesn’t necessarily have boat loads of money in the bank. This offering, while dillutive, gives the company a strong financial foundation to build upon, which is why I think investors are shrugging off yesterday’s declines and the stock is soaring today.
What We’re Seeing From The Stock
While dilution was the word of the day yesterday that sent New Age Beverages on the downtrend, the word of the day today is recovery. As investors consider the opportunities for revenue brought about by CBD-infused drinks, excitement is hitting the stock again, sending it toward the top. At the moment (10:10), NBEV is trading at $4.60 per share after a gain of $0.64 per share or 16.16% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NBEV. In particular, we’re interested in following the story surrounding the company’s CBD drink portfolio. We’ll also be looking for movements toward organic sales growth in the brands it already has on the market as this has been a bit of a struggle over the past year. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks.
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