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What Went Wrong with SodaStream?

SodaStream imploded last Thursday after reporting what may have looked like an upside surprise. But when you dig deeper, Cramer said Monday, you’ll find several things that caused this high flier to come crashing down.

First, while the company “blew away the results” when it reported, its guidance was “just awful,” Cramer said.

SodaStream said it would show about 30 percent revenue growth for the full year, which represents a dramatic slowdown from the first half’s 40 percent growth. The “Mad Money” host said that means the company is headed to about 20 percent in the second half of the year.

“This is not the kind of thing you want to see from such a high-flying growth stock,” Cramer said.

What’s more, he said, SodaStream is having issues with Costco.

SodaStream is a hope story, Cramer said, so he wanted to hear the names of new places, notably big box retailers, where they would be selling product.

“We didn’t get any,” he said. “None. In fact, we got worse—we got that tepid Costco news.”

Lastly, the company announced an initiative to move into restaurants. The hope on the earnings conference call was that the company would be moving into the soda fountain market, but instead it said it was moving into sparkling water market.

Cramer said the while the company could never equal the hype to begin with, the takeaway from the conference call was that you had to sell the stock.

“SodaStream pulled the rug out from under the longs, the people who own the stock,” he said. “That’s why it imploded.”

The lesson, he said, is to take profits has stocks go higher with the goal of playing with the house’s money.

“Just as SodaStream was emblematic of what this market likes on the way up,” Cramer said, “its post-quarter meltdown reflects the discipline you MUST have to play with momentum names.”

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