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When rapper Curtis “50 Cent” Jackson burst onto the scene in the early 2000s, his unmistakable charisma and incredible lyrical ability made him as popular in corporate boardrooms as he was with rap fans. However, 50 is more than just a rapper. He turned out to be an incredibly astute business owner, and this is the story of how he leveraged the power of his name to make $100 million in stock on an energy drink.
If you go to the energy drink section of your favorite grocery or convenience store, you will likely notice that Vitaminwater is one of the most prominently featured energy drinks. It typically occupies shelf space at or about your natural eye level—prime real estate in any retail beverage section. That wasn’t always the case.
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The energy drink sector is incredibly competitive, and gaining enough visibility to achieve market share is one of the biggest challenges facing any new product. Vitaminwater experienced that problem firsthand in the early 2000s. It had a loyal following, but legacy players like Gatorade dominated the sector, largely due to endorsements from high-profile athletes like Michael Jordan.
Vitaminwater’s parent company, Glaceau, didn’t have the financial clout to get an athlete of Jordan’s stature, meaning they had to think outside the box when looking for pitchmen. At the same time, 50 Cent had a very innovative management group. They worked out a deal for 50 to feature Vitaminwater in a Reebok ad. No one knew it then, but they were about to catch lightning in a bottle.
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50’s compensation for the original endorsement deal involved an upfront fee and stock compensation, but he didn’t stop there. During an appearance on the “Earn Your Leisure” podcast, 50 revealed how he acquired an even bigger piece of Glaceau. 50 quietly increased his equity stake by purchasing stock options from Glaceau employees who didn’t want to wait or didn’t have the money to exercise their options.
Over the next three years, Vitaminwater sales surged from $100 million to $700 million, which caught the attention of beverage giant Coca-Cola. Coca-Cola would eventually buy Glaceau in May 2007. By the time that deal was done, 50 Cent was $100 million richer, largely due to the structure of his original endorsement deal and some visionary investing on his part.
50’s decision to get Glaceau shares as partial compensation for his endorsement was smart. Using the financial muscle he’d gained from his album sales and other endorsements to acquire even more Glaceau stock was brilliant. It would prove to be one of many good financial decisions for 50. He explained his nose for making big deals by saying, “I have a disease, it’s called ambition. I contracted it from not having.”
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This article How Rapper 50 Cent Made $100 Million On Energy Drink Stock By Turning It Into a Household Name originally appeared on Benzinga.com
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