Problems at Celsius Holdings (CELH)
Edwin Dorsey, 01 October 2020
Celsius Holdings (NASDAQ: CELH — $1.63 billion) is a company like no other. The company allegedly makes healthy energy drinks and its stock is up nearly 900% in the last five years. Its investors include indicted bankers involved in 1MDB, hip-hop producer Russell Simmons, and a shark from Shark Tank. The company uses an auditor not used by any other NYSE or NASDAQ listed company and has told the SEC it does “not expect that our disclosure controls or internal controls will prevent all error and all fraud.”
Celsius is in the business of development, marketing, sale and distribution of healthy fitness drinks under the Celsius brand name. The company, based in Boca Raton, Florida, is valued at roughly 16x its trailing twelve month sales of approximately $100 million. Part of the reason for this rich valuation has been incredible revenue growth. For its most recent quarter, Q2 2020, Celsius’s revenue grew 86% compared to Q2 2019. A major contributor to this growth was European revenue, which in Q2 2020 was approximately $8.8 million, up 595% from Q2 2019 revenue of $1.3 million.
