Rockstar Energy founder Russ Savage disclosed a 4.7% stake in Celsius Holdings worth about $300 million and demanded the CEO's ouster. Celsius shares surged 12% on Friday after the activist campaign became public, following an 18% plunge on Thursday from a Q2 earnings miss.
Russ Savage disclosed a 4.7% Celsius stake worth $300 million and demanded the CEO's ouster, sending shares up 12%.
"The CEO, the COO, the brand manager and the marketing manager all need to be fired," Savage told CNBC.
Savage, who founded Rockstar Energy and sold it to PepsiCo for $3.85 billion in 2020, controls more than 12 million shares of Celsius Holdings. The disclosure follows Celsius's second-quarter earnings miss on Thursday, when the company reported EPS of 36 cents versus the 43 cents expected by Wall Street, according to LSEG. Revenue of $817.9 million fell short of the $870 million consensus, and net income attributable to common shareholders dropped by more than half year over year.
Celsius shares plunged 18% on Thursday after the earnings report, then rallied about 12% on Friday as Savage's campaign became public. The stock now trades near $25 per share. Savage said he began building his current position in March when shares traded in the low $30s, betting the stock was undervalued.
Savage said he has been quietly advising Celsius on its cost structure and marketing strategy for more than a year but was largely ignored. He said the company has too many layers of management and no real accountability. "They need one person making the decisions, paying attention to every detail, not a group of people in a firing squad," he said.
Celsius Chairman and CEO John Fieldly cited a product rationalization program and a deliberate pause in innovation as reasons for the shortfall. The company is managing the integration of Alani Nu, acquired last year for $1.8 billion, and the Rockstar brand in the U.S. and Canada, acquired from PepsiCo as part of a long-term strategic partnership. PepsiCo continues to own Rockstar internationally.
Savage said the implication that Celsius gave up shelf space to make way for other brands was a dire signal. "Once you lose shelf space, you're dead," he said. "The chains will give it to Red Bull or Monster."
Savage said he is publicly volunteering to take over as CEO. "The CEO has lost credibility with the investment community," he said. "I didn't think they would wreck it this badly. Now I'm trying to help fix it."
Celsius didn't immediately respond to a request for comment.
The activist campaign brings an experienced energy drink operator into Celsius's corner at a critical moment, as the company works through two major brand integrations while defending shelf space against Red Bull and Monster. Investors will watch whether Savage files a formal 13D or escalates his demands at the next shareholder meeting.
This article is for informational purposes only and does not constitute investment advice.
