Aldus. Eldec. Burlington Resources. Penwest. Egghead. Pacific Nuclear. Imre. Jay Jacobs.
Veteran investors in Northwest stocks might recognize those names as entries on the list of one-time Washington-based publicly traded companies.
Some of those companies still operate today as subsidiaries of larger concerns (Fluke as part of Danaher, QFC as part of Kroger). Others moved. And some melted away.
The lists of the departed are limited only by memory and space available. The roll call just of now-gone Washington banks would fill a phone book. You could compile another list comprising only Tacoma-based public companies no longer around.
Churn is good, if on occasion a bit unsettling to investors, employees and customers of those companies. An acquisition frees capital to be invested in other ventures whose backers hope will meet with similar success. A company that dwindles and disappears is an indication of an idea, a strategy or management that was tested by the market and found wanting. Stability is nice to have, too; you want to grow some companies into the next Paccar, Microsoft or Amazon.
These ruminations were prompted by the news this week that Seattle-based Jones Soda is being delisted from the Nasdaq Capital Market for failing to sustain a share price above $1.
There’s no arguing that Jones is slightly out of compliance with the rule. In the middle of last week Jones Soda stock was quoted at 32 cents a share.
That’s quite a tumble for a stock that, five years ago, traded above $12 a share. A 12-pack of Jones pure-cane cola soda is quoted on the company’s web site at $18.99. Higher math tells us that you could buy one bottle or about five shares of stock, depending on which you think is the better investment.
Five years ago, a lot of people would have picked the stock. Jones Soda made a name for itself as the hip, irreverent alternative to the dominant Coke/Pepsi duopoly in the soft drink business. It produced traditional flavors but also some Technicolor-hued varieties and a few oddities designed more for marketing than for actual consumption (turkey and gravy).
Jones was often categorized as a gourmet-soda company, which suggests a few bottles stocked by upscale grocery stores. Jones had much more ambitious aspirations, and for a time achieved them, securing the pouring rights for the Seahawks at Qwest Field.
But the company wasn’t able to leverage those marketing splashes into long-term financial success. Being the exclusive provider at Seahawks games probably perplexed soft-drink buyers who tend to be set in their habits and loyalties and wondered why they couldn’t get what they were used to. The high-profile contracts fell away. So did revenue, from $39.8 million in 2007 to $17.4 million in 2011. The company reported losses in each of the last five years. The company’s 2011 10-K offers this diagnosis: “Over the last several years, we believe that we lost our focus on our core business and participated in too many categories, which we believe contributed to our sustained losses and inability to grow our core brands.”
Jones Soda stock will still trade on the over-the-counter market, and the company is working on getting the formula right. It may yet achieve its vision of being a significant purveyor of beverages, it may find a comfortable and viable niche in which it can operate, or it may become another of those “whatever happened to ...” companies.
Neither obscurity nor fame in the investing world is permanent. Seventeen years ago, local investors would have recognized many of the names of companies whose stock is no longer traded. But who had ever heard of Amazon?
A reader reminder: Send those nominations for good and bad advertisements to bill.virgin@yahoo.com.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.
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