$MNST is up some $18 after Coke announced an almost 17% stake in the company. One trade will turn a $300 purchase into over $72k at the open tomorrow.
Coca-Cola Co. agreed to pay $2.15 billion and buy a 16.7% stake in Monster Beverage Corp. as part of a deal that combines the companies' energy drinks.
Under the deal, Coke will transfer ownership of its energy business, which includes brands like NOS, Full Throttle, Burn, Mother, Play and Power Play, and Relentless, to Monster. Meanwhile, Monster will transfer its non-energy business, including Hansen's Natural Sodas, Peace Tea, Hubert's Lemonade and Hansen's Juice Products, to Coca-Cola.
Coke also will have two directors on Monster's board.
Stock options weren't bought aggressively before the close today, but there was one trade that will be both celebrated and regretted when the market opens tomorrow.
The $75 calls which expire tomorrow saw a 60 contract trade just before the close at $.05.
The seller netted $300 on a bet that $MNST wouldn't move more than 4% to the upside tomorrow, and the option would expire worthless.
The buyer spent $300 on a hail-mary type purchase of $.05 calls that would more than likely be worthless tomorrow.
After Coke's stake announcement $MNST rallied to $90 and has settled at $87. If the stock opens at that price tomorrow, the call buyer who spent $300 is looking at an over $72,000 payday. On the flip side the seller of those options, who is hopefully sitting on 6,000 shares of $MNST, will keep the $300 the gains on MNST up to $75. If the seller sold those options naked, without a hedge, he will be looking at a $72,000+ loss tomorrow.