Burgh is correct. This could be a very serious problem.
However, sometimes it has to get worse before it gets better. GAAP requires that all advertising and marketing be expensed as it happens without regard to its future benefits. One could justify a belief that much of what goes into those expenses should be deferred, or at least viewed that way. Growth companies have to put in more for marketing for dollar of sales than mature companies.
On the other hand, SODA just wasted a ton with last Christmas and Superbowl commercials, IMO.
But, perhaps in the long run much of what didn't generate sales at the time will plant a seed in the heads of potential users that will germinate later this year and next.
They have to be successful in US or the company will fail.
Their current strategy makes sense. You don't throw good money after bad. So they are pulling back on marketing here until they feel their plan going forward has all its ducks in a row.
That would include Scarlet having baby and getting her figure back.
I think we see a new plan in place and new launch before Thanksgiving.
It sure would be nice to see SODA products at 20,000 Starbucks or at least most Kroger stores and Walgreen and CVS soon as part of that new plan.
Seems like a really dumb statement because the other side is just as true, that it's not acting like it's about to collapse either. So, no one on the Street really knows or we would see a much more defined situation.
There should be no doubt left on either side, long or short, after this release and cc. It's possible there could be questions not answered, but I think it unlikely.
Birnbaum will definitely act differently toward KO and questions related to the competition. If he can't hide his arrogance, they will fire him, IMO, as they should already have done.
If SODA has no remarkable revenues and/or earnings recovery, they must pull the proverbial rabbit out of their hat, a major partnership or a buyout, part or full, something.
If no rabbit and wishy washy on the earnings and revenues, Stockman1 will be correct.
Suppose they started buying shares to get say a 5% holding before they had to declare to SEC. What would that do to the price when the news got out? SODA trades thin. News like that would drive the price up in a hurry. So, if you wanted to control the company, you have to make a deal. Management knows or believes the company is worth far more than the market considers it's worth and therefore if a buyer wants control they will have to pay substantially more or wait.
If they wait and SODA turns things around, then the price will reflect a much higher valuation. All parties, if something is going on, have to consider this. Sell now at low or wait.
My guess is there is nothing going on and that SODA has to perform to get the price up and wait to see how things turn out after KO/GMCR enter market.
Yesterday story was from two Bloomberg reporters, one in Tel Aviv and one in London. Since no one would want to share a story unless they had to, we should assume the story originated in two places, most likely Sodastream and a confirmation from a financial institution in London.
My guess, and that's all we can do is guess, is that the story is true, that someone at SODA and someone at a financial institution discussed an idea and it was confirmed that the idea was discussed.
Means nothing, just a trial balloon to see what the reaction of current owners would say and do, IMO. Otherwise, if a deal was proposed and being readied for acceptance by BOD and shareholders, it would have been discussed or presented in some way by press release.
What they found out, IMO, is that there will be rage and law suits if they try to sell at such a ridiculously low price. Except for a few who got in at the bottom, no one can want a buyout at $40.
The fact that there were no sources quoted tells you plenty. No one would confirm such a deal unless they wanted to know the reaction of the investors and no one would take responsibility for such a deal for fear that they would get thrown out by the institutions if it was considered a very bad idea.
Some, on CNBC, theorize that things are so bad for SODA that they have to do this. I find that line of reasoning stupid because if true, why would private equity, those who would put serious money at risk, consider this? If it's insiders, the same is even more true.
If I'm inside and arguing this position with the institutions, I would be saying that the company is going down so we should accept this very low offer before it's too late. What other argument would insiders have?
I believe, as I have said previously, that the current management must go, be thrown out ASAP. They are , likely, no longer using their efforts for the best interests of shareholders. Their loyalty seems to be elsewhere.
Here's how one should view this. It is similar to emanate domain. Just because the city wants your property doesn't mean that because currently there are no other buyers that what the city says it is worth is fair. Do you get that? Over time, 6 months, a year or 2, perhaps the value of SODA may approach several billion. Those still long should have the right to participate or get the fair value of that price discounted over time.
The stock is under intense pressure from a bad couple quarters, war in mideast and potential, and I say potential, competition. All this events might alleviate very soon. insiders are trying to take advantage here. It's that simple.
If the insiders a a handful of institutions vote to take it private and participate in the privatization, where do the shareholders that want to sue go? Suppose it is privately held back in Israel. hey then keep business going another 6 months, a year and resell or go public again. W hose jurisdiction? Surely a company that was selling for $39.70 on June 18th doesn't sell itself for $40 on July 24th.
How can one not believe that this 25% drop in 5 weeks was orchestrated by those now pushing for this sale?
Does SEC get into this or are the shareholders SOL?
No, anyone with big bucks will be allowed to be on the inside of the deal. They will pull it off and screw the retail holders. That's just life on Wall Street.
what a shock. they watch it go down without a word. Lower, lower … Then whadya know, the insiders want it for less than it was selling for just a couple months a go. Think about it. Where does the money come from? From those that know the value is far more and encore ged this to happen. This is a true ****ing of the long term shareholders.
16 cases times 24 bottles is about 400 units. Let's see. Typical Walmart gets about 5,000 customers per day. If you sold a whopping 10 bottles per day, gee, it would take about 5-6 weeks to sell all that inventory. To me, that doesn't sound like a tough sell in the dog days of summer. Did you think about the numbers ?
I think that information came out of his lower bowel. There's plenty more where that came from.
I just saw an article about Keurig cold that suggested that GMCR might make $3.50/share (they have 8 times as many shares as SODA) off cold in three years. That's about $560 million in bottom line profit, almost equal to SODA worldwide sales today.
1. If true it can only be based on the partnership with KO, not the expectation of home carbonation given that SODA has had issues with US market.
2. If true, doesn't second place, theoretically SODA, get to grow along side Keurig Cold?
You have to ask yourself why the market would so quickly accept the idea of Keurig's machine and still believe that SODA's is a fad. One can argue the merits of a cold single serve versus a lukewarm liter, but fad argument would apply to both. For educational purposes I might add that you can buy an extra liter bottle or two and keep a supply of refrigerated water.
My sense is that you get what you give in business. SODA, if it wants to do business in the US, must give the US market a US look, top to bottom. That means the cc must be run by US personnel. That means advertising at all levels and design at all levels must be done by those that design for Americans, not Europeans. You want US customers, give them a US product. And, last of all that requires a major US partner, NOW, before it's too late.
You might be the dumbest guy that posts here. At least that's what I thought until I read rob henry. How much business does it take to break even for SODA here in the US. Thought so. You don't know, do you?
The pathetic nature of your post is what gets me. You know nothing about business, probably not even what break-even means.
Even Seth has posted here that SODA was not making much if any money here. How much do you think they are making now that sales are less than they were, idiot?
You actually have a lot of guts to challenge me on anything given how stupid you look since SODA price collapsed by 25% since the last exchange we had.
Yet, when something obvious, that SODA can't keep its presence here without a substantial increase in sales is said, you question it as though we are talking about some sports game.
Anyone here with a business degree knows what I said makes perfect sense. They will shut down US brick and mortar if things don't get much better real soon and real soon is the next two or three quarters. They are losing money here and won't keep doing that. They will shut it down and take a major write down.
And then there will be an LBO at pennies on the dollar because the European annuity has significant value, just not enough to keep this company above a few dollars a share.
Just maybe they have a rabbit up their sleeve. Ironically, i love the product and just can't get myself to short it. My best judgment tells me that short is the best place to be right now.
I wish many of you the best, but I fear this management is lost and just can't pull it off.
The talk on the board about not making the numbers is pretty lame, IMO. Those numbers at year end are irrelevant. SODA must come up with a way to break out in sales or it is destined for extremely low multiples of earnings. Management knows this and so do analysts.
There has to be something that happens soon that generates new and intense interest in the US. You can forget the rest of the world if SODA fails here and it is clearly failing here. The rest of the world gives you a small time annuity that sells at a single digit multiple of earnings given all the Middle East tension and lack of major growth.
You also get to write off the investment in the US market in its entirety if sales don't rapidly escalate because at the current levels you can expect a termination of business here in its entirety. It just won't be worth maintaining.
So, hope they've got something up their sleeve for this upcoming cc or kiss your as is goodbye if you're long.
Sorry, but that's how I see this at this point in time.
You're making an argument where an argument makes no sense. As long as attempts at peace through negotiation are attempted there will never be peace there. There is usually one way to achieve a long term peace. There is a war. There is a clear cut victor and then terms are dictated by the victor without any negotiation whatsoever. Then there is peace. Notice how there is peace between Japan and the US and between Germany and the US. These were not negotiated situations.
The peace might not last forever, but if you get in a fight and the other guy breaks your nose, your jaw and a few ribs, you probably won't get in a fight with him again for a very long time if ever. However, if your parents or the cops break it up and leave things unresolved, well you get the gist of it.
FWIW, I would guess that they knew that Scarlett was pregnant when they hired her and that they knew that the Superbowl commercial was a climax to a campaign not a start.
One either has to believe that SODA has capitulated and the company is in total disarray and about to collapse or that there is a plan in this madness. If a plan, perhaps they are clearing the decks, taking their losses and about to launch in a new direction. I don't know, but I know that the current plan can't be sustained without seeing teens and single digits in the next few months. I would guess the stock price would fall at about $5/month unless we see a radical departure from current marketing efforts.
Maybe they are going to try and sell stuff by using a new marketing technique, advertising, during the second half of the year.
There are two explanations. Things are so bad that they can't say anything that would help or they want the small investors out.
Everything you say makes sense, however:
Technical analysis, TA, is based on the natural process of people within the market place making day to day, minute to minute decisions on buying and selling stock. TA depends 100% on the emotional decisions of those traders. It does not rely on fundamental analysis whatsoever. I believe all TA experts will tell you that eventually all stocks will move towards a price based on fundamental valuation, P/E ratios, guidance etc.
TA also works much better with stocks that have gobs of shares to trade and trade heavily as opposed to stocks with fewer shares that trade thinly. Heavy trading allows the price to sway back and forth as emotional attitudes push it back and forth.
We know that a major announcement such as a buyout is not foretold by TA because it is assumed the market doesn't know or feel such a transaction in its moment to moment trades.
Look at SODA. It trades thinly. There are only 20 million shares and most are held by institutions. There is a huge short interest and that has been true for more than three years. So, we know there are very sophisticated traders with large interests, one way or the other, who each can dramatically affect a days action.
What I'm saying is that over the last three plus years that I have observed SODA trading, its trading hasn't followed typical TA patterns, for the most part.
Lastly, SODA is at a crossroads, IMO. Either the business plan works or it doesn't. The stock has tanked because lately, the last three quarters, there is reason to believe the plan is failing. If the plan is a failure SODA valuation is limited to some multiple, a very low multiple, of its current cash flow because the growth proposition is gone.
SODA is out of time in less than 30 days. They must either produce startling results for the second quarter or be bought out if you expect to see a rise in stock price. Otherwise the company is worth, maybe, a few hundred million, IMO. A few more days may end this story.