The Death of Jones Soda Co.

Jones Soda Co. (NASDAQ:JSDA) hit $2.65 a share today and now has just made it up over the $3 mark.  The Masters have loved this stock and Jones products, but love isn't enough when you lose $10 million in Q4 2007.  For now, it's over for Jonesie.

Jones said they were unable to "execute the details" of the soda company's "bold new direction." That showed with Q4 revenue tanking to $5.9 million from $10 million in 2006 and Q4 loss of $10.2 million, or a loss of 39 cents per share, compared with net income of $2 million, or earnings of 8 cents per share a year earlier.

"Unfortunately, we were unable to execute the details of our expansion to a level that satisfies the team at Jones Soda, which resulted in lower net revenues and unanticipated losses in 2007," said interim CEO Stephen Jones, in a statement that referred to the firm's "bold new direction." Jones added that "... in 2008, we may incur losses on our way to solidifying a platform for future profitability."

Jones reported a one-time charge of $5.5 million, attributed to a "full valuation allowance against ... net U.S. deferred tax assets." Without that charge, the company would have reported a loss of 18 cents. Analysts polled by Thomson Financial Network expected fourth-quarter revenue of $9.7 million and a loss of 3 cents per share.

This stock has been on a bad ride for the past year:

Chart for Jones Soda Co. (JSDA)

For fiscal 2007, the company reported revenue of $39.8 million and a loss of $11.6 million, or a loss of 45 cents per share, which compares with revenue of $39 million and net income of $4.6 million, or earnings of 19 cents per share.

The Masters can't see anything good about buying Jones in the near term.  At this point, wait for Wall Street to continue hammering the stock with downgrades and fireballs from the online press.  We think shares could hit $2 before you should consider buying.

Disclaimer: The Author has no positions in JSDA.

Stockmasters - Fight Club