Celsius stock jumped Monday after the energy-drink maker said that PepsiCo would make a $550 million investment in the company and become its preferred distribution partner.
The U.S. distribution agreement takes hold Monday. That agreement, Celsius said, would help put the beverage on more convenience-store shelves, where roughly 70% of energy drinks are sold.
PepsiCo will make the net-cash $550 million investment in exchange for convertible preferred stock, the companies said in a statement. The shares involved in the deal were valued at $75 apiece, amounting to an estimated 8.5% stake in CELH stock on an "as-converted basis," the statement said.
PepsiCo will also nominate a director to serve on Celsius' board.
Celsius sells carbonated and noncarbonated beverages targeting more health-conscious consumers. PepsiCo's investment in Celsius marks the beverage giant's latest move into the expanding energy-drinks business. Pepsi bought Rockstar Energy in 2020.
Celsius stock leapt 11% to 98.87 in the stock market today. The advance gave the company a valuation of around $7.5 billion.
Shares have a strong 97 Composite Rating. Their EPS Rating is 77.
CELH stock is very highly valued, but earnings are soaring while sales are growing at a triple-digit pace.
Monster Beverage Stock Falls
Monster Beverage fell 1.1% to 98.49. Shares pulled back to below a 98.83 buy point from a double-bottom base. Ratings for that stock were also strong. MNST stock has a 95 Composite Rating. Its EPS Rating is 79.
Monster Beverage got a lift in 2014 after Coca-Cola made a big investment in the energy drink giant and became Monster's "preferred distribution partner globally."
Monster reports second-quarter earnings on Thursday.
Meanwhile, Pepsi stock rose 1.1% to 176.95. It's still in range from a 173.42 buy point in a three-month consolidation. KO stock edged up 0.55% to 64.52. Shares are still in range from a downward-sloping trendline, while just getting above short-term resistance at 64.45.
