Tuesday, February 4

SodaStream Drops Amid Sanctions Over Jewish Settlements

Elena Popina
Soda Stream International Ltd., the Israeli maker of home soda machines with a factory in the West Bank, sank to the lowest since 2012 in New York amid growing criticism for businesses operating in a territory that Palestinians seek for an independent state.
SodaStream slumped 3.3 percent to $35.34 in New York, the lowest since Nov. 20, 2012. The stock plunged 26 percent on Jan. 13 after SodaStream reported worse-than-forecast preliminary earnings for 2013.
U.S. Secretary of State John Kerry, who is leading U.S. efforts to reach an Israeli-Palestinian peace deal, cautioned Israel at the Munich Security Conference on Feb. 1 about an “increasing delegitimization campaign” that includes “talks of boycotts.” Actress Scarlett Johansson publicly split with Oxfam last week after the U.K.-based charity criticized her role as a spokeswoman for SodaStream, because of its plant in a settlement in the West Bank.
“John Kerry made comments about the economic damage of the sanctions and this scared investors a lot,” David Kaplan, an analyst at Barclays Plc who has a buy recommendation for SodaStream, said by phone from Tel Aviv. “On top of that, they missed earnings without clarifying why they had missed earnings and what they plan to do going forward. The stock will be down until they figure out a way to restore confidence.”
Yonah Lloyd, SodaStream’s chief corporate development and communications officer, declined to comment on the stock move in an e-mailed statement.

‘Headwinds’ Expected

SodaStream Chief Executive Officer Daniel Birnbaum defended his company to journalists yesterday during a press tour of the plant, which employs 500 Palestinians, 450 Israeli Arabs and 350 Israeli Jews.
“We’re not a settlement, we’re a factory,” Birnbaum said.
SodaStream reported on Jan. 13 preliminary adjusted net income of $52.5 million for 2013, below the $65.4 million median estimate in a Bloomberg survey of four analysts. Chief Executive Officer Daniel Birnbaum said after the earnings were released that he expects some “headwinds” to extend into this year, overshadowing the Jan. 10 announcement that Johansson will become the face of SodaStream’s new marketing campaign.
The Hollywood actress touted a SodaStream machine in a Super Bowl ad.

Boycott Debate

Oxfam said Jan. 30 that it accepted Johansson’s decision to step down because of her work with SodaStream. The anti-poverty organization is opposed to all trade from Israeli settlements, which it says are illegal under international law, according to its website.
The boycott debate comes after pro-Palestinian activists scored several successes in a campaign to blacklist businesses operating in the West Bank and east Jerusalem, land occupied by Israel since 1967 and claimed by Palestinians for a future state.
Dutch asset manager PGGM, which oversees more than 150 billion euros ($203 billion), announced last month it would stop investing in Israeli banks because of their financial operations in the settlements. Norway’s sovereign oil fund last week renewed an investment ban on two Israeli construction companies that build in the West Bank, Africa Israel Investments Ltd. and Danya Cebus Ltd.
To contact the reporter on this story: Elena Popina in New York at epopina@bloomberg.net

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