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SodaStream Traders Bubbly on Buyout Potential After Strong Q2

Jennifer Van Grove

SodaStream is getting the benefit of the doubt from a market willing to temporarily overlook declining sales in the Americas after the company reported better than expected bottom-line results in the second quarter.

Shares of the Israeli beverage machine-maker popped 11 percent on Wednesday after it announced Q2 adjusted earnings per share of 43 cents, which came in 38 percent higher than the consensus estimate of 31 cents.

The quarter saw an 8 percent decline in revenue from soda-maker starter kits, but noticed record gas refills, said SodaStream CEO Daniel Birnbaum in a press release. The company also made significant strides in Europe and Asia, which helped make up for a 14 percent decline in sales in North and South America.

The second-quarter report wasn’t all positive, as SodaStream said its full year 2014 net income would likely come in 5 percent lower than the $42 million profit it made in 2013.

Traders seemed willing to overlook the flatter details of the Q2 report. SodaStream shares flew back into $30s, approaching last week’s more bubbly levels. The enthusiasm can likely be attributed to renewed hope in the prospect of a buyout offer or deal to go private.

Bloomberg reported last Thursday that SodaStream and an unnamed investment firm were in talks to take the company private at $40 share. In April, Starbucks was said to be in advanced talks to buy a stake in the company at a valuation of $1.1 billion.

As it stands, SodaStream is valued at $610 million when factoring in debt and cash.

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