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TheStreet Open House

'Fast Money' Recap: A Monster Deal for Coca-Cola?


NEW YORK (TheStreet) -- U.S. equities closed near session highs with the S&P 500 climbing 0.43%. 

On CNBC’s “Fast Money” TV show, the trading panel examined Coca-Cola’s (KO) new investment, a 16.7% stake in Monster Beverage (MNST)

Brian Kelly, founder of Brian Kelly Capital, said big companies like Coca-Cola need to make deals like this in order to obtain growth. He questioned if PepsiCo (PEP) is the next to make a similar move with a different company.

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Tim Seymour, managing partner of Triogem Asset Management, pointed out that PepsiCo has been aggressive in its snack business and in emerging markets. He called this a “very smart deal” for Coca-Cola, which has a superb distribution network. 

Guy Adami, managing director of, suggested that PepsiCo may not feel obligated to make a similar move as Coca-Cola, since its snack business is doing so well. 

Karen Finerman, president of Metropolitan Capital Advisors, said Coca-Cola has the right to nominate two board members for Monster Beverage, which may or may not lead to a larger stake in the future. 

CNBC’s John Jannarone noted that back in April he said a deal between Coca-Cola and Monster Beverage made sense. The deal is logical for Coca-Cola, as it will provide some much needed growth amid declining soda volume. The deal is constructive for Monster Beverage, because it will help with product distribution. Coca-Cola’s stake has the possibility to lead to a larger stake or a complete takeover in the future. 

Nik Modi, managing director at RBC Capital Markets, has a buy rating both Monster Beverage and Coca-Cola. He said Coca-Cola appears to be testing the water with its stake in Monster beverage, and may acquire more of the company if the products perform well in other market. The only other energy drink company it would make sense for PepsiCo to get involved with is Red Bull, which likely isn’t for sale. 

Read More: 7 Stocks Jim Cramer Sees Ripe for Takeover

On J.C. Penney (JCP), Finerman said the stock is “not in the death spiral anymore, so that’s a good thing.” The company is improving the balance sheet, but the valuation is still not attractive since investors are pricing in a lot of good news. Kelly said he “wasn’t in a rush” to buy shares of J.C. Penney just because the company didn’t do as bad as investors had expected. 

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