Alkaline Water (NASDAQ: WTER) stock is up 50% premarket this morning. There’s no news driving WTER stock so we assume that this is just one of those things, a little speculative flurry. Given that the market capitalisation is under $3 million it doesn’t take much trade to push the price quite hard. The short position at under 4% doesn’t look large enough for a short squeeze to be the reason here. So, as we say, just one of those things.
What worries us rather more is what is actually done at Alkaline Water: “The Alkaline Water Company Inc. produces, distributes, and markets bottled alkaline water in the United States. The company also offers bottled alkaline water in various volumes under the Alkaline88 brand. In addition, it engages in selling of sports drinks under the Alkaline88 Sports Drinks brand.”
Our view being that there’s no benefit to alkaline water. OK, making money off the credulity of the general public, that doesn’t worry us.But it does mean we think the idea has no staying power. There will be something else along soon enough that people will switch to.
Alkaline Water Company stock price from Google Finance
But what worries us rather more, and this over and above the appllingly bad performance of WTER stock, is this story: “A jury this week awarded $228.5 million to seven plaintiffs in their case against Nevada-based water company Real Water, which sold alkaline water tainted with hydrazine, a highly toxic chemical found in fuel for rockets and spacecraft.” Agreed, this is an entirely different company. Which may well have used and entirely different process. But the difficulty is in this: “The FDA identified hydrazine in product samples it tested. In the trial, Issam Najm, an environmental engineer who specializes in water chemistry and testing, testified that the hydrazine likely formed in the "ionizer," which was just titanium tubes electrified with what looked like jumper cables used to charge a car battery. Najm testified that, in the charged water, nitrogen gas naturally found in air could have reacted with water to form hydrazine (N2H4), or, during the electrolysis, ammonia (NH3) was formed first, before reacting with hydroxide to form hydrazine.”
What worries us here. The claims made about alkaline water are clearly, well, they’re just claims. But the process of making alkaline water can be - and we stress here, different company, so only can be - dangerous in themselves. And, well, you know, who wants to be around when American liability lawyers start to go on the rampage?