Monster Energy (MNST)
More so than any other claim a company can make in a Super Bowl ad, an assurance that a product won't kill the consumers using it may be the most important.
That's especially true in the case of Monster Energy, which saw its stock plummet in October after the Food and Drug Association confirmed "adverse incident reports" of five deaths involving its energy drinks. Monster is being sued by the parents of a 14-year-old Maryland girl who suffered heart problems and died in December 2011 after drinking Monster Energy on two consecutive days.A lawsuit filed by Anais Fournier's parents in California Superior Court on Oct. 17 alleges the girl drank two Monster Energy beverages that contained a combined 480 milligrams of caffeine, equivalent to about 21 8-oz. servings of Coca-Cola or 19 8-oz. servings of Pepsi.The Maryland medical examiner's office determined the girl's cause of death to be from "cardiac arrhythmia due to caffeine toxicity." This isn't great for Monster, which has been the subject of 37 such FDA reports since 2004, but it's also bad news for the energy drink business overall. The FDA limits caffeine content in soda and considers 71 milligrams per 12 ounces safe for consumption. Energy drinks contain significantly more caffeine, but exploit a loophole in the FDA's caffeine guidelines, labeling themselves "diet supplements" to avoid the limit. For example, 24-ounce Monster drinks contain almost seven times as much caffeine as the most caffeinated sodas. Monster isn't the only one being scrutinized, as caffeine shot 5-Hour Energy has also been the target of FDA reports in recent years linking it to 13 deaths. Monster could go a long way toward helping the cause by putting out a hearts-and-minds ad touting the benefits and safety of its product, but its relative silence suggests it's a bit jittery about potential changes to the FDA's energy drink policy.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts