Jones Soda Co. (OTCMKTS:JSDA) Climbing Again
When we last wrote about Jones Soda Co. (OTCMKTS:JSDA) two months ago, the ticker was on the decline. The Q2 financial results had just come out and it was pretty clear that investors were less than happy with the performance during what is considered to be the strongest quarter for the beverage industry.
As we mentioned in our previous articles, JSDA can certainly boast about a more decent balance sheet when compared to the rest of the penny stocks. Even so, they’ve been through some quite serious financial difficulties. Up until September 2012, the company’s stock was listed on NASDAQ and at one point in 2007 it even reached highs of around $20 per share. Poor financial performance and millions of dollars in annual losses, however, led to the delisting of the ticker from the national exchange and a huge depreciation.
A turn-around strategy was put in place when the current CEO, Ms. Jennifer Cue took the helm and the massive reduction in the net losses over the last quarters reveals that the plan seems to be working. A side effect, however, is the shrinking of the revenues and apparently that is what depressed the price shortly after the latest 10-Q went online. Within four days of its publishing, JSDA had lost around a quarter of its value and it showed that investors really weren’t happy with the fact that the company is generating fewer sales now that the new management team is in place.
A few weeks have passed since then, however, and it would appear that the ticker is trying to recover. Most of the recent sessions ended on a positive note and after yesterday, when another 5% were added, JSDA stands at $0.77 per share. But what is causing the current ascend? More importantly, is there anything to support a more continuous run?
Well, the deadline for the Q3 statement is approaching, but unfortunately, we’ll need to wait for a few more weeks until we have the chance to see it. The report should be a major milestone for JSDA since, according to the predictions, it should contain a net income for the first time since 2006. If that turns out to be the case, the price will certainly go up and there are probably some people who want to get in while the value is still relatively low thus giving themselves a chance for a healthy profit later on. You should bear in mind, however, that if the 10-Q fails to impress investors once again, another drop similar to (if not harder than) the one witnessed in August could be expected.
The approaching financial statement is definitely drawing in some attention, but we’re not sure that this is the only reason for yesterday’s increased trading and dollar volumes. An entity called Helix Investment Research published an article on Seeking Alpha (SA) on October 4 in which they talk about the turn-around strategy and how far it has gone. There are lots of figures, tables and an in-depth analysis of JSDA‘s current situation. Helix seem generally excited about the opportunity presented by the ticker and we’re sure that their coverage has drawn in some new traders.
Indeed, we have also said in the past that JSDA is one of the more solid penny stocks out there but it still has the inherent volatility of a small cap company. The authors of the SA article (who claim that they haven’t been compensated for their efforts) point that out as well and urge you to consider all the risks carefully before jumping in. You should definitely follow their advise on that front.
Whether JSDA really is in for such a great success remains to be seen, but in the short run, we’re not sure that the ticker really needs the extra exposure. As you probably know, penny stocks are prone to some violent movements when they are put under too much pressure from the public and what better to hammer the point home than the chart for Cloud Security Corp (OTCBB:CLDS). CLDS has been the target of a multi-million dollar promotion over the last couple of months and you can see that their performance during the last couple of days leaves a lot to be desired.
