Jones Soda Inks Deal With Walmart!

[Parsad]

A few months back, we were surprised on this board by Jones Soda being sold to Reed's for $10M, which some of us felt was cheap.  Shortly after negotiating that deal with Reed's, Jones asked for permission to entertain another unsolicited offer it had received and Reed's obliged.  Too bad for Reed's!  Jones Soda has signed a deal to be distributed through Walmart, and the market valuation today soared to almost $30M!  Why Reed's agreed to this, I don't know, but they did.  Cheers!

 

http://finance.yahoo.com/news/Jones-Soda-soars-after-apf-3891261427.html?x=0&.v=1

[ragnarisapirate]

Does anyone think that Jones will be profitable from this deal? Personally, I am skeptical.

 

[Rabbitisrich]

Yeah, it's a bit speculative at this point. The market reacted similarly to Nutrisystem 30% ago. It's hard to imagine that Jones will be able to maintain their brand strength with this move. The canned version didn't take off at Target, and they lost a lot of their exposure to yuppies and Birkenstock-wearing Jack Johnson fans when their DTR partners cancelled orders. Advertising spend is still almost 50% less than last year's, and last year was 23% less than the prior year. Also, the press release didn't specify how much time Walmart will provide for this experiment.

 

I have a bit of nostalgia for the Jones brand from my college days, but it seems like they are shedding their old tight pants and ironic t-shirt wearing customers.