By Joyce Yu
Philadelphia, PA–Wall Street drifted lower Monday as investors pause for breath after powering Wall Street to another round of record highs on Friday. The market is likely awaiting bigger moves with corporate earnings from several corporate giants due this week.
Privately held Keurig Green Mountain announced plans Monday to buy Dr Pepper Snapple to combine Dr Pepper brands such as 7UP, A&W root beer and Keurig’s single-serve coffee maker under than one roof called Keurig Dr Pepper. Dr Pepper Snapple saw its shares up 25% in early morning trading. Its shareholders will receive $103.75 per share in a special cash dividend and keep 13% of the combined company. The combined entity would have $11 billion in annual revenue, still vastly outsized by PepsiCo and Coca-Cola, which had sales in 2016 of $63 billion and $41 billion, respectively.
Headquartered in Vermont, Keurig is controlled by European investment firm JAB which has moved its investment focus from fashion to food of late. It sold shoe maker Jimmy Choo to Michael Kors Holdings last year, but still owns Swiss leather-goods brand Bally.
Unfortunately, not even Keurig’s blockbuster deal was able to steer Wall Street to new territory today. All three indexes shed by about 0.5% in morning trading.
Shares of Wynn Resorts continue to fall after a Wall Street Journal story detailed numerous allegations of sexual misconduct against its founder and CEO Steve Wynn. Wynn plunged by 11% in the morning after slashing more than 10% Friday. In a statement made by Wynn, he denied the charges in the Journal story, but resigned his position as finance chairman for the Republican National Committee on Saturday.
Also weighing down the market is Apple whose market value dropped 45 billion over the past week as investors feel worried about the demand of iPhone X. Nikkei reported Monday that the tech giant told its suppliers to reduce iPhone X production to 20 million units for the first quarter from the more than 40 million units target Apple gave in November. This comes after J.P. Morgan’s forecast predicting iPhone X production will drop 50% in the March quarter versus the December quarter. Apple will release its earnings report coming Thursday.
