Jonesing For a Turnaround

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Jones Soda (JSDA) was the ultimate pop stock earlier this year – doubling from March to April – but then Starbucks (SBUX) decided to stop selling the drinks to make room for more food, causing Jones to give up all those gains and then some. Still, the hip soda maker has a plan for a comeback.

Peter Van Stolk, the founder and CEO of Jones Soda, says the split with Starbucks has actually had “very little impact” on the company even and the market overreacted as the stock took a nose dive after the announcement.



Van Stolk is implementing a turnaround that taps into the ultra-hot energy drink market. Jones is entering into a pact to use an anti-stress amino acid popular in Japan as an active ingredient in a new energy drink, he says. The ingredient, considered safe by the FDA, is wildly popular in Japan because it provides focus without the stimulant side effects that caffeine-based energy drinks have. With the energy drink market growing “at leaps and bounds,” Van Stolk is hopeful that Jones could benefit as it looks to introduce this new beverage.

In addition to entering into the energy drink space, Jones is in the process of moving from being sold in 1,400 retailers to 15,000 – quite a leap for a once-niche soda company. Van Stolk urges caution as the brand expands. Turnarounds of this caliber take longer than a quarter to be fully implemented and their effects seen, he says.

Jeff Macke is back to being bullish on JSDA, but the rest of the traders would rather wait it out. Around 30% of the float is short, Pete Najarian says, so there’s no need to rush in. Eric Bolling prefers Hansen (HANS) for its energy drinks, or Pepsi (PEP), which is “always a great call.”

Symbol
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JSDA
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PEP
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SBUX
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Trader disclosure: On July 10th 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders. Macke Owns (ATVI), (JWN); Najarian Owns (DNDN),Finerman's Firm And Finerman Own (HD), (NMX), (WMT), S&P Puts Bolling Owns (ICE), (NMX), (T), Gold, Silver, Natural Gas, Copper, Corn