What Happened?
Shares of energy drink company Celsius (NASDAQ: CELH) jumped 5.1% in the morning session after the company announced a strengthened long-term strategic partnership with beverage giant PepsiCo, which is boosting its stake in the company by $585 million.
The agreement significantly expands the collaboration between the two companies. Under the deal, PepsiCo will acquire $585 million in newly issued convertible preferred stock, increasing its ownership in Celsius to approximately 11%.
In a major portfolio shift, Celsius will acquire the Rockstar Energy brand in the U.S. and Canada from PepsiCo. Furthermore, Celsius's Alani Nu brand will move into PepsiCo's extensive distribution system. This move positions Celsius as PepsiCo's “strategic energy lead” in the U.S., managing the Celsius, Alani Nu, and Rockstar brands, while leveraging PepsiCo's vast distribution network to reach more consumers.
After the initial pop the shares cooled down to $61.67, up 3.4% from previous close.
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What Is The Market Telling Us
Celsius’s shares are extremely volatile and have had 34 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago when the stock gained 3.1% on the news that markets continued to rally as a surprisingly subdued inflation report fueled hopes for an imminent interest rate cut from the U.S. Federal Reserve.
The July Consumer Price Index (CPI) report showed a year-over-year increase of 2.7%, which was slightly below market expectations. This tamer-than-expected inflation data was viewed by investors as a key signal that price pressures are easing. As a result, the market has strengthened its conviction that the U.S. Federal Reserve will implement an interest rate cut in September. The prospect of lower borrowing costs tends to boost corporate profitability and can stimulate economic activity, creating a more favorable environment for consumer-facing companies and fueling a broad-based market rally.
Celsius is up 127% since the beginning of the year, and at $61.67 per share, it is trading close to its 52-week high of $62.07 from August 2025. Investors who bought $1,000 worth of Celsius’s shares 5 years ago would now be looking at an investment worth $9,527.
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