Why We Don’t Trust Celsius Holdings Inc. (Nasdaq: CELH) Portrayed Growth
Grizzly Research, 09 October 2020
Celsius Holdings Inc. is a fitness beverage company that has seen its stock skyrocket in 2020 on the back of sudden and unexpected revenue growth.
Investors have been led on by strong sales trends driving sky-high expectations for the future, though our analysis shows Europe, a substantial portion of the business, is not nearly as good as it looks, with far lower and potentially negative sequential growth across Q3-2019 to Q2-2020.
We find Celsius’ acquisition of their Nordic distributor Func Foods concerning, and urge investors to question why management would commit resources to a non-core business approaching insolvency with a poor track record of successfully growing brands, serving a geography with declining sales.
Our search for a rationale revealed what appears to us to be several troublesome factors indicating Func may have been used for sales manipulation and/or channel stuffing. We highlight rising payables, beneficial distribution terms, and strong hints at Multi-Level-Marketing Activities.
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