I have to sell SodaStream (SODA) today. Sales and profits are solid, I just don’t like the fact management diluted shares. That really goes against my beliefs.
Here’s a quote from SodaStream’s 2011 Q3 Earnings release:
Net income for the three months ended September 30, 2011 was Euro 7.8 million,
or Euro 0.37 ($0.50 per the convenience translation) per fully diluted share
based on 21.0 million weighted average shares,
compared to
net income of Euro 2.1 million,
or Euro 0.16 per fully diluted share
based on 13.5 million weighted average shares, in the comparable period in 2010.
I don’t like the fact revenue rose 39% last quarter and share count rose 56%. I understand the company is building a new warehouse, but still — this company is a hundred years old and should have the cash to expand without diluting shares.
In April the company did a secondary offering of 6 million shares, at $43.50 a share, but the company sold only 1.2 million shares and shareholders sold 4.8 million shares. A $250 million secondary offering and the company only got $50 million?
Honestly, I don’t mind the dilution if the stock is going up. But SODA stock is dead in the water right now — and I don’t like the uncertainty of maybe another offering coming next year (diluting the shares even more?).
I’ll be selling SODA today from the Growth Portfolio and Aggressive Growth Portfolio.
