Celsius Holdings, Inc. (NASDAQ: CELH) saw its stock surge 6.94% in pre-market trading on Monday, following the company's announcement of a $300 million share repurchase authorization. This move has sparked investor enthusiasm, driving the stock price higher ahead of the regular trading session.
The energy drink maker's board of directors approved the share repurchase program, authorizing the company to buy back up to $300 million of its common stock. John Fieldly, chairman and CEO of Celsius Holdings, stated, "This authorization gives us the flexibility to act when we see a disconnect between Celsius' market valuation and the underlying strength of our business fundamentals." He added that the company's strong balance sheet and robust cash generation allow for opportunistic share repurchases while maintaining ample capacity to invest in growth and reduce debt.
The announcement comes after Celsius shares experienced a sell-off last week following the company's third-quarter financial results, which included $246.7 million in distributor termination costs. Several major financial institutions, including JPMorgan, Citigroup, UBS, BofA, and Stifel, lowered their price targets on the stock in response to the earnings report. The share repurchase authorization appears to be a strategic move to boost investor confidence and potentially stabilize the stock price. As the trading day progresses, investors will be closely watching to see if this pre-market enthusiasm translates into sustained gains for Celsius Holdings' stock.
Comments