Sodastreamsmall

I don't have to look at my portfolio for too long before I find its biggest loser this year. Shares of SodaStream (NASDAQ:SODA) have surrendered more than 55% of their value through the first 11 months of 2014, and there's little chance of a rally in the next few weeks to turn things around. This will be SodaStream's first down year since going public in late 2010.

How did we get here? What did I learn?

Swept up in speculation
The stock peaked two summers ago when published reports out of SodaStream's home base of Israel claimed that PepsiCo (NYSE:PEP) was in talks to acquire the company behind the namesake maker of carbonated beverages for $95 a pop. It didn't make a lot of sense, and PepsiCo quickly shot down the chatter

However, the notion that someone else -- not one of the two cola giants -- would step up and pay a premium for SodaStream did make sense. Why wouldn't an appliance maker or a non-soda beverage giant want a piece of the the global top dog in at-home carbonation? When the chatter picked up again in April -- this time coming out of Europe, and suggesting companies take a minority stake instead of acquiring SodaStream outright -- and again in September it did make sense.

The price points were lower this time around. U.K. investment firms were eyeing a stake or a takeover at about $40 a share, according to September's rumor mill. However, it represented a healthy premium to where the stock was at the time. 

I stuck around, and like others that did the same, we got burned. That's the biggest lesson that I learned with SodaStream this year. I held on to the flawed notion that some corporate entity or equity firm figured that SodaStream would be worth more in their hands than what the market was willing to shell out, and in doing so didn't place the more appropriate emphasis on the company's own cascading fundamentals.

Losing the cola war
It didn't take long to realize that last year's holiday was a disaster. SodaStream warned two weeks into 2014 that the holiday quarter would fall well short of expectations. Revenue would eventually climb 26% higher over the prior year's holiday showing, but profitability and margins got slammed. 

Stateside retailers had too many unsold SodaStream beverage makers on their hands, and SodaStream offered markdowns and took many back that it repositioned for sale in Canada and through the Home Shopping Network. 

Most of SodaStream's sales were in Europe, but the U.S. was supposed to be the hub of soda consumption. SodaStream sputtering in its most promising market should've sent shivers down the spine of investors, but hopes for a buyout kept them around. Subsequent quarters would find SodaStream hosing down its outlooks and dealing with shrinking margins. By the third quarter of 2014 even the mighty Europe suffered a rare year-over-year decline in revenue.

Every quarter has been worse than the one before. The third quarter was a doozy with year-over-year revenue falling 13% as an uptick in CO2 refills wasn't enough to offset double-digit declines in syrup flavors and soda makers. 

It's been a rough year all around between the bogus buyout rumors and the deteriorating financial performances. One silver lining -- PepsiCo deciding to test Pepsi Homemade flavors -- could lead to a broader assortment of well-known SodaStream flavors, but it certainly hasn't been enough to sway investors. 

The signs were there, dating all the way back to the third quarter of last year when flavor sales posted a surprising year-over-year dip in the Americas. It wasn't a fluke. Things got worse. New soda makers, licensing deals with beverage brands, and even striking deals with appliance makers didn't turn things around. Now that even Europe has taken a step back it will be challenging to regain its status as a market darling among growth stocks. 

New investors may be getting in at a compelling price once the tax-loss selling subsides later this month, but SodaStream ultimately has to prove that it's more than just a fad. There will be a lot at stake for SodaStream and its investors in 2015. 

Rick Munarriz owns shares of SodaStream. The Motley Fool recommends PepsiCo and SodaStream. The Motley Fool owns shares of PepsiCo and SodaStream. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.