Jones Soda (JSDA)

[Chart Addict]

I would like to thank MisterEC for sharing his perspective. Although I may be a bull on this stock, and he may be a bear, I always manage to derive some benefit from his thoughtful analysis.

It is no secret that I consider JSDA to offer a long opportunity, for technical and fundamental reasons, albeit my take on fundamentals is more based on what I see on a day-to-day basis in the field, rather than on the balance sheets.

I try to weigh the potential of having multiple faces in a convenience store that has over 11,000 locations nationwide, and of the potential of being co-branded among the 7-11 family of products, which would appear to have gained general acceptance. I say this because it would appear to be expanding both in its offerings, and in the amount of display space dedicated to it in the stores. I don't know that any analyst has found the means by which to measure that potential. (Of course, there is also the potential for global expansion, but we don't know what the potential for that is, at this point in time).

In the business world, there are many things that are difficult to quantify. What is the true value of a Super Bowl ad? If you are Coca Cola or Pepsi, the boost in sales may be readily apparent. If you are a retailer, the increase in sales may be spread out over several quarters. If you are a car manufacture, measuring the impact of the brand awareness and goodwill that you may have generated with such an ad may take years, as people generally don't rush out and buy a new car based on even the most creative of television ads.

Getting back to JSDA more specifically, What is the value of co-branding? I can readily think of some instances in which outright mergers didn't work very well at all. The Amazon.com/Toys r Us alliance; the merger between K-Mart and Sears; AOL/Time Warner; Chrysler and Daimler; General Electric and Honeywell International. But this is an entirely different matter. Jones Soda has, in effect, become part of the 7-11 brand of products. And, as 7-11 is privately held, they are under no obligation to report sales.

On a related matter, I can't help but notice how well Dollar General and Family Dollar appear to be doing since going private. Much like 7-11, they seem to know just where to position themselves.

Convenience comes at a price.