From staff reports SAN FRANCISCO – Celsius Holdings Inc. and some of its top executives are the targets of a securities class-action complaint.
The Seattle-based law firm Hagens Berman is investigating the allegations and urges Celsius investors who purchased shares and suffered substantial losses to submit their losses.
The complaint alleges that between Feb. 29 and Sept. 4, 2024, the defendants concealed adverse facts about the company’s outlook and expected financial performance, particularly as they related to the company’s largest customer/distributor, Hagens Berman officials said in a Nov. 26 news release.
The complaint alleges that the defendants failed to disclose the following information to investors:
• Celsius sold more inventory to Pepsi than the customer needed and faced the possibility that Pepsi would significantly reduce its purchases of Celsius products.
• As Pepsi drew down significant amounts of inventory overstock, Celsius’ sales would decline, hurting the company’s financial performance and future outlook.
• Celsius’ sales rate to Pepsi was unsustainable and created a misleading impression of Celsius’ financial performance and future outlook.
• As a result, Celsius’ business metrics and financial prospects were not as strong as the company indicated in its class period statements.
“The truth began to emerge on May 28, 2024, when the price of Celsius shares dropped almost 13% as analysts digested some of the latest retail store trends reported by Nielsen,” Hagens Berman officials said in the news release. “According to the complaint, analysts noted that Celsius’ sales growth slowed from the prior year period and sequentially warned that sales could be dramatically diminished as Pepsi reduced the amount of Celsius inventory it held.”
The price of Celsius shares dropped over 11% on Sept. 4 after an investor presentation, during which Celsius revealed that it was seeing approximately $100 million to $120 million less in Pepsi orders compared to the prior year quarter, officials said.The company said Pepsi was holding several million more cases over the past 1 ½ years than it really needed.
Celsius investors who experienced substantial losses or have information that could assist in the investigation should contact Hagens Berman at CELH@hbsslaw.com or call (844) 916-0895.
The lead plaintiff deadline is Jan. 21, 2025.