Celsius Holdings, Inc. (OTCMKTS:CELH) Bounces
The roller coaster ride of Celsius Holdings, Inc. (OTCMKTS:CELH) is still not over, it seems. After the company had a hasty trip up and down the charts, it shifted its biggest dollar volume for the last year, at $2.1 million worth of CELH stock changing hands on Friday. This was accompanied by a new surge up the charts. CELH closed 23% up, climbing back over $3 per share.
The company is in the beverage business and its flagship product is the “negative calorie” slimming Celsius drink. Formerly trading on the NASDAQ, CELH went through a voluntary delisting in late 2010 after it received a notification of non-compliance relating to the exchange’s minimum shareholder equity requirements.
The reason why CELH doubled in price and shot from $1.50 to over $3 per share in late April was a press release issued on April 21. The company announced a “strategic” investment of $15.9 million from “global business icons”, including American music mogul Russel Simmons, founder of Def Jam records, his ex-wife Kimora Lee Simmons and China-based venture capital firm Horizon Ventures.
There was obviously a lot of rejoicing among investors when the news hit the wire, as they bought CELH stock up all the way to intra-day highs of $3.55 last Tuesday. The stock’s pullback was inevitable, considering how massively overbought it had become and how quickly it had doubled in price. However, there is something more to the investment deal that the PR does not quite disclose.
The filing describing the deal in more detail lists the sale of 12.9 million CELH shares to the group of investors, at $0.89 per share. Additionally, ‘certain members’ of the investor group purchased a $1.5 million outstanding convertible note and immediately converted it into 5,000,000 shares priced at $0.30 each. On the day the deal was signed, CELH closed at $1.79 per share. It does not take a math major to see how much cheaper the shares issued as a result of the deal are.
Whether CELH has more fuel to burn up and shoot further up the charts again remains to be seen.
