Recent Class Action Lawsuit Against Celsius Holdings: What Investors Need to Know

Celsius Holdings Faces Class Action Lawsuit

In recent news, Celsius Holdings, Inc. has come under scrutiny following the filing of a class action lawsuit. This lawsuit, spearheaded by Pomerantz LLP, alleges that the company, known for its popular beverage products, may have engaged in securities fraud and other unlawful business practices. Investors who have suffered losses related to their investments in Celsius are urged to take action amidst important deadlines that have been set.

Key Details of the Lawsuit

The lawsuit specifically targets Celsius and certain officers and directors of the company, bringing to light concerns regarding transparency and the company's handling of shareholder interests. According to court documents, investors are encouraged to contact Pomerantz LLP directly to explore their options. Shareholders have until January 21, 2025, to request appointment as Lead Plaintiff if they purchased Celsius securities within the relevant timeframe.

Stock Price Volatility

The situation was exacerbated when, on May 27, 2024, Celsius’s stock price plummeted by nearly 13%. This drop occurred in tandem with analysts' critiques on the company’s declining sales growth and market share as reported by Nielsen. Morgan Stanley's insights revealed a concerning slowdown in year-over-year sales growth, prompting a decline in investor confidence which directly impacted the stock performance.

On September 4, 2024, Celsius disclosed further alarming information: its sales to Pepsi, a major partner, dropped significantly. The downward revision in orders—$100 million to $120 million less than the previous quarter—sent the stock price into a further spiral, concluding the trading day at approximately $32.39, down $4.25 or 11.59%.

Further Disclosure and Financial Health

The revelations did not stop there. On November 6, 2024, Celsius reported a staggering decline in revenues for the third quarter of 2024, attributing the downturn to various factors including significant promotional allowances and reduced orders from Pepsi. Their revenue fell to about $265.7 million, a stark contrast to the $384.8 million reported in the same quarter the previous year, representing a 31% decline. Notably, North American revenues suffered a 33% decrease.

Furthermore, Celsius reported a gross profit margin dip to 46%—down from 50.4% a year earlier, compounded by the effects of promotional allowances that did not favor the company's financial metrics.

Moving Forward

Pomerantz LLP is recognized for its relentless advocacy for shareholders’ rights and has been instrumental in recovering billions in damages for class members. With a legacy of over 85 years in corporate litigation, the firm continues to stand at the forefront of class actions, particularly those involving securities and corporate misconduct.

As the situation develops, Celsius shareholders must remain vigilant and informed about their legal rights and the timelines involved in these proceedings. Participation in this class action could potentially offer them a pathway to reclaim some of their losses amidst the adverse conditions facing the company.

Conclusion

This class action lawsuit against Celsius Holdings serves as a critical reminder for all investors—the importance of due diligence and the need to stay updated on the companies they invest in. With deadlines approaching, affected shareholders should consider their legal options while following the latest updates on this evolving case.

For more details, impacted shareholders can reach out to Danielle Peyton at Pomerantz LLP for further assistance regarding their rights and options.