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February 2013

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Monster Beverage Misunderstood

February 23, 2013 – Comments (0)

I have been reading a significant amount of commentary regarding two issues which are instrumental in the recent stock movement of MNST. I think both are misunderstood and neither one has any long term impact on furture value of the company. Let us start with the buyout rumors. MNST is repeatedly rumored to be a buyout candidate and every time this occurs, the stock price jumps. I will go on record as stating I do not believe MNST is a candidate for a buyout. To start Coke and Pepsi are the only companies that have any chance of acquiring MNST and neither has shown any real interest in doing so. The current market cap for MNST hovers around 8.7 billion. With expected revenue of 2.1 billion, this company would not be a cheap acquisition. Considering a five year ROI of nearly 30% and a one year ROI of more than 37% I would be shocked to see a sale price of less than 11 billion and an asking price of more than 12 billion would not surprise me one bit. This would be an extremely expensive acquisition for either company, even when you consider their respective sizes.  [more]

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