Investing in SodaStream (NASDAQ:SODA)

Jeff Siegel

Written By Jeff Siegel

Posted October 7, 2014

sodaThere was piece on CNN Money this morning about why SodaStream (NASDAQ:SODA) was tanking.

Journalist Jesse Solomon wrote:

Shares of the home carbonation machine maker sunk 21% to an all-time trading low Tuesday after the company released poor preliminary results for the third quarter.

The culprit: Americans aren’t buying SodaStream’s products anymore.

I’m still amazed as hell that Americans were buying their products to begin with.

I suppose there was a giddy novelty to it. And certainly there are plenty of debt-laden suckers in this country that are more than happy to throw an extra $70 on their Visas and MasterCards for something most will never use more than once.

The truth is, Americans love toys and gadgets, and we make no apologies for buying these non-essential items while complaining about the cost of 87 octane, milk and healthcare.

In any event, I’ve never really been a fan of this company, and never understood why anyone would invest in it. Boy was I stupid!

Back in May, 2012, you could’ve picked up shares of SODA for about 30 bucks. On June 10, 2013 it hit $77.80.

So basically, in a year’s time, you could’ve more than doubled your money by investing in a company that chest-pounds the fact that its product can allow you to turn tap water into sparkling water in under 30 seconds.


SodaStream also boasts that by buying their machine, you can help the environment. This little ditty can be found on the company’s website:

SodaStream is an “Active Green” product, meaning that consumers are actively reducing their CO2 footprint every time they make soda or sparkling water at home instead of buying it from the store. The more the system is used on a daily basis, the more CO2 footprint the user actively saves. (This differs from “Passive Green” products, which use green-friendly production processes, but their products are not inherently helping the consumers save on their daily footprint.)


Yes, I’m quite certain that folks who feel the need to make their own soda at home waited to check on SodaStream’s eco-credibility before making their purchasing decisions.

While I certainly won’t argue with the fact that we’re doing a bang-up job crapping plastic bottles into our oceans and rivers, the company’s reaching a bit here.

Of course, this has nothing to do with the company as an investment. And truth be told, while I was mocking the legions of SodaStream fans who marched into Bed, Bath and Beyond to buy one, smarter investors were spending their time making money.

My colleague Chris DeHaemer was one of those “smarter investors.” Especially since he made sure his readers took their profits off the table before the stock took a nosedive.

Since the start of the year, SODA has fallen nearly 60%, basically trading right around its 2010 IPO price of $20. And I don’t have much hope for its future.

Essentially, I think its quirky customer base has moved onto the next pointless gadget to shove into the corner of their kitchens to collect splattered bacon grease and dust. Now I just need to figure out what that is, so I can invest appropriately.

Never underestimate the power of American consumers, no matter how stupid their purchasing decisions may be. Because as I’ve learned, their actions are better indicators of growth than rational thought.

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