Celsius Holdings, Buy the Dip? Print E-mail
By Vinny Cassano   
Tuesday, 21 September 2010 00:00

Another ordinary trading day for Celsius Holdings, Inc. (NasdaqCM: CELH) on Friday turned ugly during the last half hour when a rather significant volume spike (in relative terms for the lightly traded CELH) dropped the stock nearly 15% in a flash. 

Before that late-day, late-in-the-week action, CELH was trading on very light volume for weeks following the last quarterly report, aside from a minor volume spike during a few trading sessions over the past week - and by "minor" I'm referring to a few instances when I was shocked to see 20,000-30,000 shares traded in one day. 

The question that many squeamish investors will ask themselves now is whether the drop in price was a headfake or a decline based on merit that may be a preview for a further drop once trading resumes on Monday morning. 

Since Celsius Holdings is such a lightly traded stock, making it victim to easy manipulation, it wouldn't be too far fetched to believe that the same purchases that caused a slight volume spike earlier in the week last week could have been used to dump the price down at the end of the week. 

The theory becomes even more convincing when you know just how dedicated the Celsius bashing crew is to their mission; we're talking 24/7, round the clock, hundreds of postings a week.  Anyone with a bit of common sense understands that people do not devote this amount of time to an activity in which they have no financial interest - especially not in the stock market - so it's safe to assume that what we have hear is a group of individuals who are either looking to continue or cover a short position, or who are trying to chip away and slowly accumulate a large position over time. 

On that note, however, the attacks on Celsius from the company's most dedicated of bashers carry a personal undertone, leading to speculation - if only on my part - that there could be a few disgruntled former employees out there trying to exact revenge. 

Whatever the objective - money or vendetta - these guys definitely have the time, dedication and resources to meet that objective while living out their alter-egos in cyberspace.

So where does that leave the stock? 

It's possible that a long time holder could have dumped at the end of the day on Friday to move on to another investment with the potential for a quicker payout, or it's possible that the drop was a head fake intended to re-ignite the feeling of fear and panic around the Celsius stock.

It's my opinion, that whatever the reason is, CELH is back to 'screaming buy' territory. 

Here's  a company with a novel product - a colorie burning beverage that tastes good - is growing distribution and is ready to introduce new products onto the market. Maybe most importantly, it's a healthy product geared towards fitness at a time when America, if not the world, is starting to realize the negative effects of sugar-laden energy drinks and junk food products.

It's been a tough road for Celsius Holdings, surviving an economic collapse and expanding into a market (Lebanon) when a civil war was just about under way,  but surviving the storm may have the company on the brink of significant growth and success. 

Domestic and international distribution is growing, and the recent move into the military market should not be overlooked.   

It's my opinion that the drop on Friday - should the stock continue trading that low during the coming week - makes CELH a screaming buy once again.  Should the decline head down closer to a buck, then I'd have to call that "load-the-boat time," but that is my own opinion. You should always do your own DD.

Keep in mind that while the stock is so lightly traded the games will be easy for the players to play, but the goal for the little guy is the end-game, not the tomorrow-game; and this story is still developing.

Nice.



Disclosure:  Long CELH.

Vinny also authors the popular biotech investing blog VFC's Stock House.

 




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