next 48 house. He told me to ‘show him the money.’ By that he meant explain who makes all the money in the industry and how they do it.”
“Hmm, that is interesting, very interesting,” mused Beth. “ You know, SodaStream’s stock has been on a roller coaster ride in the past couple of weeks.”
“What are you talking about?” asked Anna Claire.
“I’m talking about SodaStream being in play.”
“Huh?”
“An Isreali financial newspaper printed a story about Pepsi being in talks to acquire SodaStream in early June.2 The stock popped almost 8 percent in pre-market trading the day the story came out, but that was before Pepsi nixed the story the same afternoon.3 I bet that’s the deal your boss is working on,” Beth said.
“Isn’t that the end of it?” Anna Claire asked.
“Apparently not. Pepsi said it wasn’t making any large acquisitions, but investors still bid up SodaStream stock in the hopes that Coca-Cola was interested. The stock hit a high of about 78 bucks on takeover rumors, but has now plunged to about $60-well under where it was before the Pepsi rumor hit the press. It didn’t help the stock that the New York Post ran a story last week that said SodaStream had been shopping itself quietly for the past three months4-but no one was interested in buying. I bet your boss is trying to figure out if he should buy the stock on the pullback in the price.”
The next morning, Anna Claire arrived at the office at 6:00 and got to work downloading the annual reports for Coca-Cola, PepsiCo, Dr.Pepper Snapple Group, and Sodastream. “Yikes, this is going to be more complicated than I thought. I bet I don’t get a wink of sleep for the next two days,” Anna Claire thought ruefully. As Anna Claire clicked on the file containing SodaStream’s 10K, her mind was full of questions. “Is SodaStream even in the same market as Coke and Pepsi? Why would investors think Coke and Pepsi might want to buy the company? Is SodaStream a disruptive innovator of the carbonated soft drink market? What do the bottlers have to do with Coke and Pepsi? I guess I’d better figure out what SodaStream does first and then think about the competitions.”