Coke Steps Up For A Fight, And SodaStream's Not Backing Down

SodaStream (NASDAQ:SODA) recently did something that no other company would dare. It picked a fight with the biggest kid on the block and is surprisingly holding its own. For those of you who don't know, I am referencing SodaStream's new marketing campaign, where it uses a large cage full of used soft-drink bottles and cans to demonstrate that packaged drinks are bad for the environment.

SODA first displayed its "cage full of bottles" in South Africa and has since received two letters from a lawyer who represents Coca-Cola, threatening a lawsuit if the displays are not removed. But rather than SODA being intimidated by the presence and influence of Coca-Cola, SODA has basically decided to go hang out at Coca-Cola's front door in Atlanta Georgia, across the street from Coca-Cola's museum, according to an article first reported by Bloomberg.

When I first read the Bloomberg article I had three impressions: First, is SODA crazy? Then, good job for SODA at proving that it is not intimidated by anyone, even the big kid on the block. And then finally, why would KO even waste its time on SODA, because after all, isn't KO a $170 billion company and SODA a $750 million company?

Obviously, SODA is not stealing market share from KO anytime soon. SODA could double revenue year-over-year for the next two years and its growth would only be a fraction on Coke's income statement. Coke is still the powerhouse, along with PepsiCo. (NYSE:PEP), but SODA is growing the fastest and may steal the money of investors who seek a breakout company, and who like a good underdog story.

SODA is a company that I've watched since early last year, when it was trading between $50 and $60 per share. Back then I was saying how overvalued the stock was trading, but now with a multitude of key developments and explosive earnings I now feel it is one of the better values in the market.

Besides the fact that SODA continues to improve its revenue, income, and margins by a considerable amount, it has also announced several developments to insinuate future growth. The company's products can be found in over 50,000 retailers, SODA has partnered with Kraft (KFT), is rolling out a large marketing campaign, is now located in 2,900 Wal-Mart (NYSE:WMT) stores, and is preparing to launch its first automatic electric carbonation product.

As of now it seems somewhat strange that Coca-Cola would even take the time to address SODA's marketing technique and mention a lawsuit. KO is the dominant force in the industry, but with SODA's large patent portfolio, maybe KO believes that SODA has the potential to become a legitimate competitor several years done the road. SODA is now gaining the attention of investors, and is trading with momentum. The company is expected to continue growing at a rapid rate throughout the remainder of 2012, and when it launches its first automatic electric system it could take the company to a who new level, as it would appeal to hotels, hospitals, and even some restaurants.

Overall, I think the company is moving in the right direction, and will provide large gains for shareholders. And who knows, maybe one day we'll look back and realize why KO took the time to try and stop SODA from its marketing campaign. Because one thing is for sure, this is not Green Mountain Coffee (NASDAQ:GMCR) - it is a legitimate business that is growing at a rapid rate, and is not afraid to go after the big kid in the neighborhood.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

DIsclaimer: This article is for informational purposes only and should not be used to make any investment decisions.