Celsius Holdings (NASDAQ:CELH) surged on Friday as investors appeared reassured by the company’s potential growth prospects, given its record full-year revenue results and its latest acquisition of a rival energy drink brand.
Shares of the once-high-flying beverage maker popped $5.90, or 23.1%, to $31.43 in early Friday trading.
Celsius’ fourth-quarter revenue came in at a record of $332.2 million, higher than the $326 million in revenue expected from analysts polled by LSEG. Adjusted earnings of 14 cents per share also topped analysts’ forecast for 11 cents, per LSEG.
The company also said its agreed to acquire Alani Nutrition, maker of the female-focused Alani Nu drinks popular with social media influencers, for $1.65 billion in a deal combining both cash and stock.
“The transaction will combine two growing, scaled brands in the U.S. energy drink category, creating a leading better-for-you, functional lifestyle platform that is well positioned to capitalize on the growing consumer preference for zero-sugar alternatives,” the company said in the press release.
A so-called short squeeze where investors who sold the stock short are forced to cover their bets may be helping fuel the pop. Celsius was a heavily shorted name, with 22% of its shares available for trading sold short, according to FactSet.
The stock is significantly off its 2024 highs as Celsius has struggled with its expansion, after it previously rapidly scaled to compete with the market share of its larger competitors, Red Bull and Monster Beverage.
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