Don’t Sell Yourself Short, Sodastream International Ltd (SODA)

Page 1 of 2

SodaStream International Ltd (NASDAQ:SODA) may be on the bidding block after all. The New York Post reports that the company behind the namesake beverage maker that turns flat water into flavored soda has been quietly trying to sell itself for at least three months. Sources are saying that interest in acquiring the fast-growing pop star is waning.

It’s just as well. Sodastream International Ltd (NASDAQ:SODA) shares moved nicely higher last month, after Israel’s Calcalist reported that PepsiCo, Inc. (NYSE:PEP) was looking to acquire the company in a $2 billion deal.

Sodastream International Ltd (NASDAQ:SODA)Calcalist is a fairly reliable source, and Sodastream International Ltd (NASDAQ:SODA) is headquartered in the business publication’s Israel base. Just weeks earlier, Calcalist was correct in breaking the story that Israeli traffic app Waze was in play. But in the SodaStream story, putting PepsiCo, Inc. (NYSE:PEP) as the potential buyer at roughly $95 a share didn’t make sense. Why would PepsiCo buy a company that could potentially cannibalize its business, and anger its bottlers, distributors, and retail partners along the way?

Well, The New York Post claims that PepsiCo, Inc. (NYSE:PEP) was only exploring the purchase of Sodastream International Ltd (NASDAQ:SODA)’s carbonator refilling business. But why would SodaStream part with such an important component of its operations?

It wouldn’t be the worst thing in the world for Sodastream International Ltd (NASDAQ:SODA) investors if the buyout chatter faded away. I offered up some potential suitors last month, but the ideal situation is for SodaStream to keep growing at its heady pace as an independent company.

Sodastream International Ltd (NASDAQ:SODA) is at an exciting point in its growth cycle. Revenue climbed 34% in its latest quarter. Even the mature Western European market is growing at a double-digit clip, but the really sudsy explosion is taking place on this side of the Atlantic, where stateside unit sales of soda makers, carbonator refills, and syrups rose 78%, 101%, and 119%, respectively, during the quarter.

The U.S. migration is still in its infancy, with market penetration of just 1%. Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), the company behind the Keurig single-cup coffee platform that’s often compared to Sodastream International Ltd (NASDAQ:SODA) as a consumer-facing beverage system, is already at 13% of the market. Investors who bought early into the Green Mountain story made out nicely. That wouldn’t have happened if Green Mountain had cashed out to a java giant at the time.

Skeptics who argue that a home-based soda maker will never be as popular as Keurig may want to travel to some of Sodastream International Ltd (NASDAQ:SODA)’s more established markets. The company already has more than 10% market penetration in four countries. Its systems are a fixture in nearly 25% of the homes in Sweden.

It the Post sources are correct, it’s easy to be cynical about Sodastream International Ltd (NASDAQ:SODA)’s growth. Maybe it’s putting itself up for sale because it sees the healthy growth decelerating soon. Finding a larger food, beverage, or kitchen appliance giant to help it take things to a new level would be a good way to keep moving in the right direction. However, SodaStream hasn’t backed away from earlier claims that it sees its business more than doubling to $1 billion by 2016.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!