Keurig Green Mountain Inc. (GMCR:US), the maker of home-brewing machines for coffee, tea and other beverages, jumped 8.4 percent yesterday, the most in almost a month.
Shares of the Waterbury, Vermont-based company rose to $122.07 as of the close, the biggest one-day gain since May 8. The run-up brought the year-to-date gain to 62 percent.
“People are wary going into the weekend in case there is an announcement of some kind,” Christopher Rich, head options strategist at JonesTrading Institutional Services LLC, said in a phone interview from Chicago. “Volatility has spiked.”
Yesterday’s surge continues a rally for a company that has benefited from a growing market for its products and an investment by Coca-Cola Co. (KO:US) earlier this year. In February, Coke bought 10 percent of Keurig and announced plans to work together to make a system for producing single-serve cold drinks. Coca-Cola is increasing its stake to 16 percent, making it the company’s largest shareholder.
The deal has raised speculation that Coca-Cola will acquire the rest of the company, though that may depend on how successful the joint product is, Sanford C. Bernstein & Co. said earlier this year. Coke has a history of taking equity stakes in companies that it acquires years later.
Coca-Cola is teaming up with Keurig as consumers increasingly shun sodas for alternative drinks, a trend that’s stunting Coke’s revenue growth. The Atlanta-based company purchased 16.7 million newly issued Keurig shares in February as part of the partnership, driving the coffee maker’s stock to a record $123.74 that month.
Representatives from Coca-Cola and Keurig declined to comment.
More than 58,000 calls traded yesterday, the most since February, according to data compiled by Bloomberg. The $120 calls that expire this month were the most active contract and rose to $5.05 from 30 cents.
To contact the reporter on this story: Callie Bost in New York at firstname.lastname@example.org
To contact the editors responsible for this story: Nick Turner at email@example.com; Lynn Thomasson at firstname.lastname@example.org