what changed? half a million in losses and continued decline in sales. people dont invest money in companies losing revenue at the clip of 10%. especially not in sectors with sector wide contraction. the company - if private - would be worth half of its present cap or less. if it were private, it would be bankrupt actually. so far cue cut expenses. is that hard to do? memo: no more marketing budget, no shelf purchases, and fire people. wow. tough. maybe i should get a couple million free shares for that.
when sales rise or when there are significant earnings on existing sales (or even on somewhat reduced sales), then you will have volume. there has been no positive news release since she took over. hence the 28 cents share price. hence the lack of investors.
more diliution to follow, of course as cash runs out due to losses STILL of 2 million a year. happy to be corrected. have not listened to the cc. cuz, nothing changes.
fair question. here is my problem. the company has no direction and no product. jones soda stands for what exactly? what brand cache do they have? what have they innovated? what are they selling? soda with artificial colorants and flavors for children? really? i mean really? unique labels? they were unique 15 years ago. that is why sales are plummeting - and 10% yoy decline is a plummet. clearly i have to listen to the cc to see how same store sales are doing etc and all those other metrics. but, fufuberry soda with red dye 17 is a dead product. over. history. garbage. not cool to drink unless you are 8 years old and no parents are around. this is why reeds is growing and jones is down to 30 cents - sorry - up to 30 cents. there is no turnaround here. there is a slower death. and complete apparent lack of ideas. i can hire a salesperson full time for minimum wage in about 3 minutes. the problem is they have no product to sell, no meaningful brand, no vision. i wish i were wrong.
nice post. but here is the problem. the stock is wildly overvalued at 30 cents. public companies can stay overvalued for a long time. many do. to justify the market cap, the company would have to figure out how to make another 1.5 million a year in gross profit. or sell another 8 million in gross at current ratios. ok. right. fufuberry company has to seem sincere to whole foods buyers? among a sea of products? i don't believe it can happen. soda is a bad business now. they would have to come up with something dramatic to show investors actual profitable growth. so far, i dont see it.
in the press release. reed is oddly not able to state they can make an actual profit selling soda. i do not get it. and the K margin is appears marginally better than soda, while they said it was much better. i think the stock sells off a little tomorrow, as this is just not all that impressive. it is a bit irritating. also strange is the company's turn from product announcements to financial and investor announcements over the last three months. seems desperate. but i have not listened to the cc yet. i just thought the PR was terribly written or obviously avoiding how they did for the quarter.
some really disturbing comments in the conference call has me doubting the performance of reeds. chris made some really bad decisions.
1. clearly they are neglecting the main brands, private label and non-K products. they are are apparently absorbed by K such that they were "surprised" the sodas sold well in January? but reeds is a soda company primarily, not a K company. the soda market is vast, and K market is tiny. why the fascination? the effort should be primarily in soda.
2. the profitable quarter so proudly bragged about was acknowledged to be a fluke?? a product of a perfect storm? huh. i must have forgotten those comments that profitability was far off and the then profit was a fluke.
3. flat YOY private sales. took an investor to question that as chris and company tried to brush off the quarter while touting what a great year it was.
4. the great bottle design? a disaster. stupid. amateur stuff. but was that the only really bad decision? hardly. mistakes like that don't happen in isolation. sure they can be corrected over time. and it will just take a year or so correct the mistakes. good if you didnt just lose half your investment. not so good if you did.
5. no wonder they are having trouble getting people to cooperate with the roll out.
6. smaller bottles and higher cost than GT? that is how you take on the leader. GT is not scared by this.
the roll-out really screwed up everything here. i hope they get this figured out. the investors will need something pretty profound to believe in this story again, when any reasonable p/e is not a thought for years.
down a bit, i think. they seem really lost. and there is no vision of a meaningful profit for a long time. as long as sales continue to grow, the stock will not drop terribly on this news, but the stock upside is very limited for the risk involved. if growth slows for a quarter, oh my, then you go back to $3.
watched it. sigh.
they desperately need to hire a marketer. someone who knows what they are doing and can innovate and discipline CR. in this interview he hammers ginger products as going global and mainstream, but in the cc's he is all about kombucha with little thought to ginger products. and china cola. ok. golly. the premium cola is called china cola? rename fiji water to guadalajara water. see how it sells. seriously, what marketing person would name a premium cola china cola. going for that positive connection between china and bottled beverages. next up: China baby formula from Reeds.
so frustrating. cuz its so obvious and easy to get right. and they get it wrong.
look at our awesome bottle and label. oops sorry - turns out it sucked. who would have thought of testing something as unimportant as a bottle and label?
you flat out called this. amazingly prescient commentary, beyond what the analysts indicated, beyond the street, beyond the company guidance. what a poor, poor performance by AIRM management here. they are not even sure what happened to them! well called Ralph.
so ralph, what is your opinion at this point. is this a buy or the beginning of a period of problems again. the stock was savaged so far and even management seems clueless as to what the problems are.