Celsius (CELH) False or Misleading Statements and Stock Losses Class Action

On March 1, 2021, Celsuis Holdings, Inc. (NASDAQ: CELH) announced that it would not be able to file its 2021 annual report on time. This, the complaint alleges, was because Celsius had made false and misleading statements during the previous periods, violating the Securities Exchange Act of 1934. Celsius’s stock price fell more than 8% over the next two days. The complaint names as defendants the company itself as well as its Chief Executive Officer (CEO) and Chief Financial Officer (CFO).

The class for this action is all persons and entities who bought or otherwise acquired the securities of Celsius Holdings between August 12, 2021 and March 1, 2022 who were damaged thereby.

Celsius sells pre- and post-workout functional drinks, liquid supplements, and protein bars.

On March 1, 2021, after the market had closed, when Celsius announced it would not be able to file its 2021 annual report, the company said it was because of “staffing limitations, unanticipated delays and identified material errors in previous filings.”

The complaint quotes the company as saying it had “determined that the calculation and expense of non-cash share-based compensation … were materially understated for the three and six month periods ended June 30, 2021 and three and nine month periods ended September 30, 2021.”

The figures that were understated were for “non-cash share-based compensation, related to grants of stock options and restricted stock units awarded to certain former employees and retired directors…”

According to the complaint, the defendants made false or misleading statements and had not disclosed adverse facts about Celsius’s business, operations, or prospects. The complaint alleges that the defendants made false or misleading statements in four areas:

• They improperly recorded the expenses for non-cash share-based compensation for the company’s second and third quarters of 2021.
• They misstated the company’s results, with the restatement having to show a net loss for the third quarter of 2021.
• Statements by the CEO and CFO that “our disclosure controls and procedures were effective” for the misstated reports were therefore also false.
• As a result of all this, the “positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.”

This news was announced on March 1, 2022, after the market had closed. On March 2, the stock experienced an intra-day low price of $56.21 per share in heavy trading. By March 3, it had fallen by a total of $5.20, to $57.60 per share, representing an 8.3% loss. This caused losses to those who owned Celsius shares.

The complaint alleges that the defendants in this case knew that their statements were false or misleading when they made them.

Article Type: Lawsuit
Topic: Securities
Tags: Providing False or Misleading Information, Securities, Stock Losses