Sodastream International Ltd (NASDAQ:SODA) experienced a 17% stock plunge in New York as it struggles to keep its promise.
The company had vowed to reinvent itself as a health-conscious manufacturer of sparkling-water machines, but investors seem to be responding in a different way. The firm took a huge hit this time with a 17% stock drop on the New York Stock Exchange. Especially compared to the minimal 2.1% drop that was registered in Standard & Poor’s 500 Index over the same period.
The stock plunged for 11 consecutive days before finally going up on Friday. The firm has been hard at work trying to cultivate success in the United States to reach the same level experienced in the European region. The company had attempted to make an entry with a brand aimed to compete with energy drinks from The Coca-Cola Co (NYSE:KO) and PepsiCo, Inc. (NYSE:PEP). Unfortunately, the plan was not in line with the shifting consumer preference where consumers are looking for healthier alternatives.
Steven Schoenfeld, from BlueStar Global Investors LLC, said that the market had built up a lot of expectations for the market. Unfortunately, there was a lot of disappointment when the company failed to successfully execute its plans in the American market. The firm was unable to reach the $100.9 million sales estimate set by analysts in the first quarter. The actual sales amounted to $90.3 million. In the previous year, SodaStream had managed to make sales worth $118.2 million within the first quarter.
Sodastream International Ltd (NASDAQ:SODA) officials claim that the low demand for carbonated water and the foreign currency fluctuations have a lot to do with the share decline. The company has been trying to reverse the deteriorating state of the business since last year amidst new startups in the market. SodaStream Chief Executive, however, stated that the firm does not expect a lot of competition especially from newcomers such as the Keurig Kold machine. The company’s U.S. officials have not revealed further details about the company’s plans for the future.