Russ Savage, the founder of Rockstar Energy, has built a stake of more than 12 million shares in Celsius Holdings and is calling for the removal of its chief executive after the energy drink company reported second-quarter results that missed analyst expectations earlier this week.
Savage told CNBC that the position represents approximately 4.7% of Celsius Holdings, with a market value of around $300 million given where the stock currently sits. He said he is pushing for the departure of Celsius Holdings Chairman and CEO John Fieldly, as well as the company’s chief operating officer, brand manager, and marketing manager. “The CEO, the COO, the brand manager and the marketing manager all need to be fired,” Savage said. He also said he is willing to step in as CEO himself. “I’m publicly volunteering to do it,” he said. “The CEO has lost credibility with the investment community.”
Celsius Holdings stock dropped 18% on Thursday after the company’s second-quarter revenue of $817.9 million, representing 11% growth year over year, fell short of what analysts had forecast. Adjusted diluted earnings per share of 36 cents also missed the consensus analyst estimate. Net income fell 45% to $55.3 million from $99.9 million in the same period a year earlier.
Speaking on the earnings call, Fieldly pointed to a product rationalization effort and a deliberate pullback on new launches as contributing factors, while also noting challenges tied to bringing Alani Nu — a $1.8 billion acquisition — and the U.S. and Canada rights to the Rockstar brand into the fold. He conceded that Celsius may have gone too far in trimming its product count as it tried to clear room on shelves for newer offerings. PepsiCo continues to own the Rockstar brand outside the U.S. and Canada.
Savage, who founded Rockstar in 2001 and sold it to PepsiCo in 2020 for more than $4 billion, said he began acquiring his current position in Celsius Holdings in March when the stock traded in the low $30 range. He said he had been providing strategic advice to the company for more than a year but was largely ignored. His chief concern is that Celsius Holdings has too many management layers and insufficient accountability. “Once you lose shelf space, you’re dead,” he said. “The chains will give it to Red Bull or Monster.”
In response, a Celsius Holdings spokesperson said the company welcomes potentially value-creating ideas from shareholders and that board and management members have met with Savage multiple times over the years. “We remain focused on executing our total energy portfolio strategy to drive durable, long-term growth,” the spokesperson said in a statement.
Celsius Holdings shares recovered to around $27 on Friday, bouncing off Thursday’s close after CNBC published details of Savage’s position. The stock had already fallen 36% for the year through Wednesday’s close.
