Key Takeaways
- Russ Savage, the entrepreneur behind Rockstar Energy, has accumulated approximately 12 million shares of Celsius Holdings, representing a 4.7% ownership stake valued at around $300 million.
- Savage is publicly advocating for the dismissal of multiple senior executives, including the CEO, COO, and top marketing personnel.
- The Rockstar founder has positioned himself as a potential replacement CEO.
- Shares of Celsius rebounded approximately 12% on Friday, recovering some losses after an 18% decline the previous day triggered by disappointing quarterly results.
- The company’s second-quarter earnings per share came in at 36 cents, falling short of the 43-cent consensus, while revenue of $817.9 million missed projections of $870 million.
Shares of Celsius Holdings experienced a significant rally of roughly 12% on Friday following reports by CNBC that Russ Savage, the entrepreneur who founded Rockstar Energy, has discreetly assembled a 4.7% ownership position in the energy drink maker and is now demanding sweeping changes to the executive team.
Following Friday’s advance, shares are trading near $27, recouping a portion of the steep 18% selloff experienced on Thursday.
The previous day’s decline followed Celsius reporting second-quarter earnings of just 36 cents per share, significantly below analyst expectations of 43 cents. The company’s revenue totaled $817.9 million, falling short of the $870 million forecast. Net income dropped by more than 50% year-over-year.
In his interview with CNBC, Savage disclosed that he now controls over 12 million shares of Celsius, representing an investment of roughly $300 million based on current market prices. He began accumulating his position in March when shares were changing hands in the low $30s.
“The CEO, the COO, the brand manager and the marketing manager all need to be fired,” Savage stated during the interview.
Beyond his critical assessment, Savage has made it clear he’s willing to step into the top role himself.
“I’m publicly volunteering to do it,” he declared. “The CEO has lost credibility with the investment community.”
Savage launched Rockstar in 2001 and negotiated its sale to PepsiCo in 2020 for over $3.85 billion. He credits his success to maintaining direct oversight of every operational aspect, including sales channels, distribution networks, product design, and brand partnerships, and believes Celsius requires similar focused management.
According to Savage, he had been providing informal guidance to Celsius regarding cost management and marketing approaches for more than a year before making his concerns public.
“I didn’t think they would wreck it this badly,” he remarked. “Now I’m trying to help fix it.”
Leadership’s Response
During the quarterly earnings conference call, Celsius Chairman and CEO John Fieldly attributed the weaker-than-expected performance to a strategic product rationalization initiative and a temporary halt in launching new offerings. He also referenced the ongoing integration of Alani Nu, which was acquired for $1.8 billion last year, along with the Rockstar brand rights for the U.S. and Canadian markets, also purchased from Pepsi.
Fieldly conceded that the company may have been overly aggressive in discontinuing certain product lines to create space for newer launches. He emphasized that Celsius continues to represent one out of every five energy drink purchases in the United States.
Retail Distribution Concerns
Savage forcefully challenged that rationale, warning that losing retail shelf placement represents a critical threat to the business.
“Once you lose shelf space, you’re dead,” he warned. “The chains will give it to Red Bull or Monster.”
He contends that Celsius is burdened with excessive organizational layers, bloated expenses, and insufficient executive accountability.
In response to the criticism, Celsius issued a statement saying it values input from its shareholders and confirmed that both the board and management team have had multiple discussions with Savage over recent years.
Celsius stock finished Thursday’s session around $24 before rebounding to approximately $27 on Friday.
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