Once upon a time, "Celsius" was just that confusing measurement system Europeans use to make Americans feel dumb. “It’s 30 degrees out.” Oh, so I need a coat? “No, you’ll be sweating.” Thanks, Pierre.

Then came the pandemic, and suddenly, Celsius was far more than a unit of measurement… it was the energy drink for people who wanted to pretend they were making a healthy choice while chasing clout on Instagram.

And if you had the balls to grab shares at its IPO on February 21, 2020, you would’ve witnessed one of the most insane rips in recent memory… up 1,700% by November 5, 2021.

But much like every guy who got shredded during lockdown only to abandon the gym the second bars reopened, Celsius stock hasn’t been looking so great lately. It’s down 58% in the last year, getting bodied by legal battles, Pepsi distribution problems, and an energy drink market that’s turning into a full-blown Hunger Games scenario.

So what does a struggling company do when it's losing market share? It makes a big acquisition and hopes investors eat it up. And eat it up they did.

Celsius just announced it’s dropping $1.8 billion (through a mix of cash and stock) to acquire Alani Nutrition, a female-focused energy drink brand that’s popular with influencers and gym rats. While I’ve seen a few investors make the point that it’s a negative sign feeling like you have to buy out your competition because you can’t compete… investors seem to disagree considering the stock is up 35% already.

Alani Nu was founded in 2018 and has been on a tear, growing like crazy in an already oversaturated market. Analyst Gerald Pascarelli from Wedbush gave his thoughts : "Strategically this deal makes good sense, as Alani is one of the fastest-growing brands in energy with meaningful distribution whitespace.”

In other words… Celsius just grabbed one of the last good seats at the energy drink table before Red Bull, Monster, and Ghost start flipping chairs and cutting throats.

Look, Celsius needed a win. The company’s growth had been grinding to a halt after PepsiCo cut its inventory levels, and its retail market share gains had slowed to a snail’s pace. Last quarter, its U.S. retail market share was 11.6%... which, while decent, barely budged from a year prior (11.5%).

Adding Alani Nu gives Celsius some much-needed firepower. The combined company is expected to generate $2 billion in annual sales, a solid jump from Celsius’ $1.36 billion revenue in 2024. Plus, this isn’t some shotgun wedding… Alani Nu has a strong brand presence, and its products align well with Celsius’ “healthy but still gonna keep you wired” positioning.

Oh, and there’s also the massive short squeeze happening. Celsius was one of the most shorted stocks out there, with 22% of its float sold short. So when the stock popped on the Alani Nu news, shorts had to cover fast, adding more momentum to the rally.

Celsius’ stock is still down 75% from its March 2024 all-time high, so there’s a long way to go before it gets back into beast mode. But if this acquisition can reignite growth, expand market share, and prove it can compete with the Red Bull-Monster duopoly (if that’s even a word), then maybe (just maybe) this stock can wake up from its 2024 slump.

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Stock.News has positions in Pepsi.