Faruqi & Faruqi Investigates Celsius Holdings for Securities Violations
New York, Friday, 10 January 2025.
Faruqi & Faruqi, LLP is investigating potential claims against Celsius Holdings for securities violations, focusing on significant investor losses and alleging mismanagement of sales to PepsiCo.
Investigation Details and Timeline
Celsius Holdings, Inc. (NASDAQ: CELH) is currently facing a federal securities class action lawsuit, with a lead plaintiff deadline set for January 21, 2025 [1][3]. The investigation centers on investor losses during a specific period between February 29, 2024, and September 4, 2024, particularly focusing on investors who suffered losses exceeding $75,000 [1]. The stock has shown significant volatility, with the most recent trading showing a decline of 5.14% to $27.52 USD on January 10, 2025 [3].
Core Allegations and Financial Impact
The primary allegations revolve around Celsius materially overselling inventory to PepsiCo, Inc., leading to substantial reductions in future sales [1]. On September 4, 2024, the company revealed a significant reduction in sales to PepsiCo, ranging from approximately $100 million to $120 million compared to previous orders, causing the stock price to drop over 11% [1]. The impact became more evident in the third quarter of 2024, when Celsius reported revenue of $265.7 million, marking a 31% decline from $384.8 million in Q3 2023, with North American revenues specifically falling by 33% [1].
Recent Performance and Market Response
The company’s financial challenges have been substantial, with gross profit decreasing by $71.9 million (37%) and gross profit margins declining from 50.4% to 46.0% year-over-year [1]. Despite these setbacks, some market analysts suggest potential recovery, with reports indicating that Celsius Holdings is poised for a strong 2025 after a challenging 2024, particularly as the PepsiCo inventory correction comes to an end [2]. The stock has experienced a significant decline of over 50% in 2024 [2].
Legal Proceedings and Investor Response
Multiple law firms have joined the investigation, including Kessler Topaz Meltzer & Check, LLP, who announced their involvement on January 8, 2025 [3]. Faruqi & Faruqi, LLP is actively encouraging whistleblowers, former employees, and shareholders to provide information regarding Celsius’s conduct [1]. Investors seeking to serve as lead plaintiff must move the Court no later than January 21, 2025 [1][3].