Will Jones Soda Sellout for 30 Cents per Share?

Jones Soda Co. (NASDAQ:JSDA) products taste better and are better quality then its massive rivals Coke (NYSE:KO) and Pepsi (NYSE:PEP).  However that doesn't mean jack to Wall Street if you aren't growing your revenue and increasing shareholder value.  Jones Soda has lost 94% of its market cap since mid 2007 and it could all be up for sale at 30 Cents per share.

Today Jones Soda (JSDA) shares are trading at 47 cents, this week its stock has lost another 25% of its value.  More from theDeal.com on the potential Big Red Holdings offer -- Specialty beverage company Jones Soda Co. (NASDAQ:JSDA) has been known for the diverse flavors and unique names for its drinks, such as D'Peach Mode and Bohemian Raspberry. With Jones contemplating a takeover, perhaps the Seattle-based company may want to create a new drink, such as Lone Star Strawberry, in honor of its potential new owner Big Red Holdings LLC of Texas.

Jones Soda's board is analyzing a 30 cents per share, or $7.9 million, cash offer from privately held Big Red Holdings. It doesn't sound like much, but that is what the market values the falling Jones Soda.

Jones Soda CEO Joth Ricci said:

"Adverse economic conditions have continued to negatively impact our liquidity and financial condition and caused us to explore strategic alternatives in an effort to enhance shareholder value. While the board conducts this process, we will continue to focus on executing our strategy."

Jones Soda's strategy now seems to be survival and avoid bankruptcy. The company has its back against the wall as losses are expected to continue in 2010 while its stock flounders around the 47 cents a share level, much less than a bottle of Jones Soda. The noose continued to tighten on Jones Soda as KeyBank terminated its $15 million line of credit in November.

Long gone are the heydays of the mid-2000s to early 2007 when Jones Soda's earnings increased by 700% while its stock followed the upward trend, trading at nearly $28 a share in 2006. The meteoric rise during that period was spurred on by increased distribution, but that availability proved costly, which wasn't matched with continued rising sales over the last two years. The company has tried to keep costs down recently, laying off about 75 people over the last 18 months and now it has about 40 employees.

But that may not be enough, for now. Jones Soda's only salvation seems to be Big Red. The only question is: Will Jones' board accept the offer that will guarantee its survival? - Gerald Magpily

SOURCE: http://www.thedeal.com/dealscape/2009/12/jones_soda_could_be_swallowed.php