Russ Savage now controls 4.7% of Celsius, worth about $300M, and wants the CEO fired after an earnings miss sent the stock down 18%.
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Russ Savage, the billionaire who created Rockstar Energy and sold it to PepsiCo for $3.85 billion in 2020, now controls more than 12 million shares of Celsius Holdings. He wants the energy-drink maker's chief executive replaced, he told CNBC.
The stake amounts to roughly 4.7% of Celsius, worth about $300 million at current prices. Savage said he has been quietly advising the company on cost structure and marketing for over a year and was largely ignored. Now he wants new leadership.
"The CEO, the COO, the brand manager and the marketing manager all need to be fired," Savage told CNBC.
Celsius didn't immediately respond to a request for comment.
The push comes a day after Celsius shares plunged 18% on a second-quarter earnings miss. The company reported 36 cents per share against the 43 cents Wall Street expected, according to LSEG. Revenue of $817.9 million fell short of the $870 million consensus. Net income attributable to common shareholders dropped by more than half versus last year's second quarter.
On the earnings call, Celsius Chairman and CEO John Fieldly blamed a product rationalization program and a deliberate pause in innovation for the shortfall. He said the company was 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 partnership. Pepsi continues to own Rockstar internationally.
Fieldly said Celsius may have been overly aggressive in cutting products to make room for newer lines. Still, he said, the company sells one of every five energy drinks in the U.S., and the category remains strong.
"We are a key growth driver for the energy category, and we are just beginning to unlock the full potential of our expanding portfolio," Fieldly said.
Savage said Celsius has too many management layers, too many costs, and no real accountability. He called the implication on the earnings call – that Celsius gave up shelf space to make way for other brands – a dire signal. In the hypercompetitive energy drink market, brands rarely reclaim lost shelf space, he said.
"Once you lose shelf space, you're dead," he said. "The chains will give it to Red Bull or Monster."
Savage is offering to take over as CEO before the problems become too deep to fix, he said. When building Rockstar, he managed every detail: sales, marketing, sponsorships, packaging, distribution, and innovation. He said the same cost-conscious, driven leader is needed at Celsius now.
"I'm publicly volunteering to do it," he said. "The CEO has lost credibility with the investment community."
Savage has owned Celsius shares on and off for more than two years. He started building his current stake in March, when the stock fell into the low $30 range, buying what he saw as an undervalued name poised for recovery. He blamed management missteps for the continued decline.
"I didn't think they would wreck it this badly," he said. "Now I'm trying to help fix it."
Savage, born Russell Weiner, started Rockstar with a $50,000 mortgage against his California condo. Celsius shares traded near $27 Friday afternoon, up sharply after CNBC reported Savage's stake.
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