Celsius Holdings (CELH) had one of its worst days of the year on Wednesday, then one of its best two days later.
The stock dropped 18% after a weak second-quarter earnings report, only to jump about 12% on Friday.
The reason for the rebound had nothing to do with the company’s results. It came from one man with a large checkbook and a public demand.
Russ Savage, the founder of Rockstar Energy, revealed he had built a stake in Celsius worth roughly $300 million.
He then went on national television and called for the removal of the people running the company, starting with the chief executive officer.
Investors liked what they heard. For shareholders who have watched Celsius stock fall for most of the year, the pitch offered something the last earnings report did not: a possible path to change.
Why the Celsius stock rally started with a public demand from Russ Savage
The catalyst was direct and personal.
Savage told CNBC he controls more than 12 million Celsius shares, or about 4.7% of the company.
He said the current leaders have lost investors’ trust, and he offered to step in as chief executive himself.
His words were blunt. He said the CEO, the chief operating officer, the brand manager, and the marketing manager all need to be replaced, Investing.com reported.
Savage has a track record that gives the demand weight. He founded Rockstar in 2001 and sold it to PepsiCo in 2020 for $3.85 billion.
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Savage said he began buying his position in March, when the stock traded in the low $30 range, according to Quartz.
He also said he had offered Celsius strategic advice for more than a year and was largely ignored.
That history is part of why the market reacted the way it did. Investors were not just buying a stock. They were pricing in the chance of new management.
What the weak second-quarter earnings report revealed about Celsius
The activist push landed one day after a rough earnings report.
Celsius posted second-quarter revenue of $817.9 million. That was up about 11% from a year earlier, but it fell short of the roughly $886 million analysts expected, according to Investing.com.
Adjusted earnings came in at $0.36 a share, below the $0.43 consensus.
The bigger concern sat inside the flagship brand. Sales of the core Celsius line fell about 11.7% from a year earlier, Celsius reported.
Management pointed to three causes. It cut the number of products on purpose. It paused new launches. It spent more on promotions.
All three tie back to one thing: folding in two recent acquisitions, Alani Nu and Rockstar, the company Savage sold to PepsiCo in 2020. Celsius acquired the North American rights to Rockstar.
Profitability slipped. Gross margin narrowed to48.1% from 51.5% a year earlier, driven by those promotions and a shift in where sales came from.
For a stock priced for fast growth, a shrinking core brand and thinner margins gave investors a real reason to worry.
Even after Friday’s increase, Celsius trades about 42% below where it started the year.
How the fight over Celsius leadership could play out for CELH investors
The board has already picked a side.
Celsius said its directors support John Fieldly staying as chairman and CEO.
A company spokesperson said Celsius welcomes ideas from shareholders and that its board and management have met with Savage several times over the years, Quartz reported.
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That sets up two clear paths, each with a different outcome for shareholders.
Here is what investors should weigh:
- If the board keeps Fieldly, the short-term jump from Savage’s campaign could fade, and shareholders would stay exposed to the slowing core brand, falling margins, and the work of managing three brands at once.
- If Savage forces a change, he could build support with other large shareholders or launch a formal proxy fight, which would likely mean deep cost cuts and a renewed focus on the main Celsius product.
One factor makes the stock especially reactive to news like this. About 20% of the tradable shares are sold short, according to ZeroHedge.
When a stock with heavy short interest gets good news, those bets can unwind fast and push the price higher.
The risks Celsius shareholders should not overlook
A 12% rally can hide real problems.
Celsius is still working through the integration of Alani Nu and Rockstar. Changing leaders in the middle of that process could add friction and slow the work down.
There is also the shelf-space problem. Savage warned that once a brand loses space in stores, rivals like Monster and Red Bull take it, and winning it back costs money.
That spending could hold margins down for several quarters, even if a new CEO takes over. So the fix Savage is selling may take time and cash before it shows up in results.
One more point matters here. PepsiCo owns about 8.5% of Celsius and holds a board seat as its main US distributor, according to MarketScale.
The distribution deal is central to how Celsius reaches stores, so any campaign to reshape the company has to keep that large shareholder on its side.
What Celsius investors can do next
If you own Celsius or are thinking about buying, there are a few things to look out for.
Watch how big institutional shareholders line up. If major asset managers back Savage, the pressure on the board grows. If they back Fieldly, the current plan stays in place.
Check the company’s long-term targets against today’s numbers. Celsius still points to a goal of $4.0 billion in revenue by 2029, according to Simply Wall St.
A shrinking core brand makes that target harder to reach without a turnaround.
Also note where Wall Street stands. Several firms cut their price targets after the report, with JPMorgan moving to $56 from $70 and Stifel dropping to $45.
The stock is still down more than 40% for the year. This is a high-volatility situation, and the public nature of the fight can swing the price in either direction on a single headline.
For most investors, the practical move is to size the position to match your own tolerance for that kind of risk, rather than chase a one-day rally.
This is not a recommendation to buy or sell. Treat the rally as the opening move in a fight that still has to play out, not as proof the turnaround is already here.
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