SodaStream stocks dropped another 21% today, an all time low for the home seltzer corporation whose principal manufacturing facility is located on a Jewish settlement in apartheid Occupied Palestine. Officially the story is revenues: SodaStream Shares Plunge To All-Time Low On 53% Income Decline.
Unofficially, it’s the boycott. The 52-week high for the corporation was $64 and it’s lost 2/3 of its value over the past year, now hovering under $22 a share. When Barclays cut SodaStream’s rating to “Underweight” in May, predicting the company would sell for as little as $35 a share within a year, Barclays analyst David Kaplan cited “rising competition and short-term performance risks”. But Kaplan saw the boycott damage back in February:
“John Kerry made comments about the economic damage of the sanctions and this scared investors a lot,” David Kaplan, an analyst at Barclays Plc who has a buy recommendation for SodaStream, said by phone from Tel Aviv. “On top of that, they missed earnings without clarifying why they had missed earnings and what they plan to do going forward. The stock will be down until they figure out a way to restore confidence.”
This isn’t just about scared investors, it is about scared consumers. (Zero Hedge my bold)
“We are very disappointed in our recent performance,” said Daniel Birnbaum, Chief Executive Officer of SodaStream. “Our U.S. business underperformed due to lower than expected demand for our soda makers and flavors which was the primary driver of the overall shortfall in the third quarter. While we were successful over the last few years in establishing a solid base of repeat users in the U.S., we have not succeeded in attracting new consumers to our home carbonation system at the rate we believe should be achieved.
Predictably SodaStream’s vaunted “mixologist competition” flopped. It’s not just about “attracting new consumers”, it’s the bloody bubbles!
SODA stock actually had to be halted: [what “halted” means http://en.wikipedia.org/wiki/Trading_halt ]
• Revenue to be approximately $125.0 million; expected: $154.4 million
• Operating income to be approximately $8.5 million; expected: $17.6 million
Translated: the SodaStream fad is officially over…frankly, right now we have no idea how to turn around the Titanic after it has hit the Iceberg.
Analysts, it’s time to be honest about why SodaStream is tanking. Take a look at this, it may take a while to download but it’s worth it. BDS works. SodaStream’s brand is the Titanic.
Update: This just in from Equities.com, finally some mention of the Scarlett effect in today’s coverage, and how the exposure damaged SodaStream’s brand:
[T]he stirring of the Scarlett Johansson story resulted in increased attention on the fact that one of SodaStream’s manufacturing plants is located in the West Bank, a fact brought to the fore after Johansson was forced to resign from her role as an ambassador for human rights organization Oxfam, role she had held for eight years, due to her association with SodaStream. Of course, as is always the case, there was a measured and balanced response from the general public regarding the Israel/Palestinian situation and SodaStream’s part in it. Just kidding, it absolutely injected a divisive political issue into SodaStream’s brand that SodaStream clearly wanted nothing to do with.
Missed this earlier; Laura Chesters, business reporter for The Independent answers The 30 Second Briefing: SodaStream:
It has been a tough year
Yep, it faced criticism when protestors boycotted the brand due to it owning a factory in an illegal settlement in the Israeli-occupied West Bank. Film star Scarlett Johansson was involved in the row after she quit her role of goodwill ambassador for Oxfam due to her endorsement of SodaStream.