LOS ANGELES--(BUSINESS WIRE)--The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Celsius Holdings, Inc. (“Celsius” or the “Company”) (NASDAQ: CELH) common stock between February 29, 2024 and September 4, 2024, inclusive (the “Class Period”). Celsius investors have until January 21, 2025 to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to participate.
On May 27, 2024, Morgan Stanley reported that weekly retail data showed Celsius with slowed sales growth and cautioned that the Company faced difficult sales comparisons over the next several quarters as it rolled over the anniversary of its Distribution Agreement with Pepsi. On this news, Celsius’ stock price fell $12.23, or 12.9%, to close at $82.92 per share on May 28, 2024, thereby injuring investors.
Then, on September 4, 2024, the Company disclosed during a conference that Celsius’ sales to Pepsi were reduced from “roughly around [$]100 million to [$]120 million . . . from what [Pepsi] ordered last quarter,” and that Celsius was “still seeing these inventory levels being reduced” and that it had “increased” in the third quarter of 2024. On this news, Celsius’ stock price fell $4.11, or 11.3%, to close at $32.39 per share on September 4, 2024.
Then, on November 6, 2024, Celsius released its third quarter 2024 financial results, revealing a 31% decline in revenue and a 37% decline of gross profit due to “promotional allowances, incentives, and other billbacks as a percentage of gross revenue” resulting from Pepsi’s drawdown. On this news, Celsius’ stock price fell $1.69, or 5.3%, to close at $30.04 per share on November 6, 2024, thereby injuring investors further.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) Celsius materially oversold inventory to Pepsi far in excess of demand, and faced a looming sales cliff during which Pepsi would significantly reduce its purchases of Celsius products; (2) as Pepsi drew down significant amounts of inventory overstock, Celsius’ sales would materially decline in future periods, hurting the Company’s financial performance and outlook; (3) Celsius’ sales rate to Pepsi was unsustainable and created a misleading impression of Celsius’ financial performance and outlook; (4) as a result, Celsius’ business metrics and financial prospects were not as strong as indicated in defendants’ Class Period statements; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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If you purchased Celsius securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 2121 Avenue of the Stars, Suite 800, Los Angeles, California 90067 at 310-914-5007, by email to info@frankcruzlaw.com, or visit our website at www.frankcruzlaw.com.
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