Can Celsius Stock Avoid Repeating Crocs' Mistake?
The $1.8 billion purchase of Alani Nu could be a game changer, but that's also what Crocs thought when it went shopping three years ago.
Celsius Holdings (NASDAQ: CELH) stock became energized on Friday. Shares of the lifestyle brand of sparkling beverages that boost metabolism when consumed just before elevated cardio activity opened sharply higher following better-than-expected fourth-quarter results and a seemingly growth-invigorating acquisition.
The fourth quarter itself was a respectable recovery for the company, which surrendered half of its value last year. We'll get to that later. The real driver sending Celsius stock 33% higher at Friday's open is the seemingly perfect move to acquire fellow lifestyle brand Alani Nu in a $1.8 billion cash and stock deal. It looks great on paper. Investors better hope that this isn't a repeat of the time when Crocs (NASDAQ: CROX) thought it could jump-start its meandering growth with the acquisition of Heydude.
Celsius was growth stock royalty until proving mortal last year. It delivered three consecutive years of triple-digit growth before closing out 2024 with back-to-back quarters of declining revenue. Growth investors started to move on, and the plummeting share price wasn't enough to woo value investors. It needed something to shake things up, and that's exactly what it's getting in buying Alani Nu's parent company, Alani Nutrition.
