New Age Beverages Corp (NASDAQ: NBEV) is having yet another incredibly strong start to the trading session today, and the gains are coming for two reasons. First and foremost, investors are excited about a potential takeover by Coca Cola. On top of that, the company recently announced a new agreement that greatly expands its retail footprint. Today, we’ll talk about:
- The news;
- what we’re seeing from NBEV stock as a result; and
- what we’ll be watching for ahead.
UPDATE – NBEV is planning on unveiling its CBD product portfolio at the North American Convenience Store show in early October.
Why NBEV Is Gaining
As mentioned above, there are a couple of reasons why New Age Beverages is seeing gains in the market today:
First and foremost, rumors started to surface a couple of sessions ago that Coca Cola is interested in taking NBEV over. The rumors came as Coca Cola is rumored to be interested in getting involved in the cannabis sector. At the same time, NBEV recently applied for various trademarks in what seems to be preparation to launch new, cannabis-related drinks. Nonetheless, the rumors continue to swirl around the market, leading to excitement.
Perhaps more importantly, yesterday New Age Beverages announced the expansion of its retail footprint with an agreement that will put its products in all Ahold Delhaize outlets across the Eastern Seabord with new permanent off-shelf merchandising racks that will be in more than 600 outlets.
These off-shelf merchandising racks are important as they tend to lead to an average of 450% increase in sales when compared to traditional on-shelf merchandising. Also, NBEV reminded investors that Ahold Delhaize is one of the largest retail outlets in the world, with 2,300 outlets in the United States.
In a statement, Krista Lumley, Brand Manager for Búcha Live Kombucha, the NBEV brand that will be placed in stores under this agreement, had the following to offer:
New Age has so many opportunities in front of it, but some of our most exciting opportunities lay in our untapped core brands that are just at the beginning of their lifecycles. Búcha is not just the fastest growing brand in the category, it also has a preferred taste by more than 43% vs. leading competitors, which as more and more consumers gravitate away from carbonated soft drinks, positions it as a very accessible and healthier alternative. Now with more distribution, and more merchandising with great partners like Ahold, more consumers will be able to enjoy this great brand.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that it’s important to keep a close eye on the news. After all, the news tends to move the market. In the case of New Age Beverages, the news released as of late has been overwhelmingly positive. So, it comes as no surprise that investors are excited, sending the stock screaming for the top. At the moment (9:46), NBEV is trading at $3.19 per share after a gain of $0.37 per share or 13.12% 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 potential acquisition to see if there is any validity to the rumor. We’re also interested in watching the company’s revenue growth following the announcement of this new agreement. Nonetheless, we’ll continue to keep a close eye on the news and bring it to you as it breaks!
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