CONSUMER

America’s Energy Drink Obsession is Supercharging Celsius, the Country’s Third-Largest Beverage Company

Dunkin’ in the morning, energy drink in the afternoon. That’s the formula many Americans use to power themselves through the day. But for some, it’s straight energy drinks through the day — a love affair that churns out $21.1B annually in the US. However, health concerns are leading people to seek out healthier options, which has given birth to a rising king of energy drinks.

Energy gauge: After years of clawing market share from beverage giants like Coca-Cola ($KO) and PepsiCo ($PEP), Celsius Holdings ($CELH) has become America’s third-largest beverage company by sales, fueled by demand for its energy drinks. In a highly competitive market, the brand positioned itself as a healthier energy drink in contrast to its sugary competitors.

• Its meteoric rise made it one of the greatest stories in US market history — with its stock returning over 7,100% over the past five years.

• Since then, the company has gone from just $1.7M in quarterly revenue to $347.4M, a 20,400% increase over 21 quarters — with sales doubling for three years straight.

Drink to the duopoly

Celsius’ growth still pales in comparison to Monster Energy’s ($MNST) 73,850% run since 1985 — making Monster one of the best-performing stocks of all time. Celsius is also caught in the middle of a long-time rivalry between Coca-Cola, who has a minority stake in Monster, and PepsiCo — who decided to back Celsius.

• In 2022, PepsiCo invested $550M in Celsius, becoming its distributor and largest shareholder, which could help it pick up market share in the low-sugar, high-energy drink market.

• For brands, getting prime shelf space can make or break a brand, and PepsiCo’s investment gave Celsius a massive distribution network of retailers.

Forward-looking: The price tag is high for investors eyeing Celsius, with a steep 80x price-to-earnings ratio — significantly higher than the S&P 500’s 23.2x. Nevertheless, analysts foresee another year of banner growth for Celsius. Stifel analysts upgraded the stock to $95 (11% upside) yesterday, citing the company’s fast-growing market share and expectations for Celsius to capture 14% of the beverage market by June.

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LARGECAP RECAP

🚗 Fisker is collapsing after smoldering review

Back in 2020, electric vehicle maker Fisker ($FSR) went public at a $2.9B valuation, with eyes set on outselling Tesla. Fast forward four years, and the company is teetering on the edge of bankruptcy — having sold just 4.7K vehicles. And making matters worse, one of YouTube’s biggest tech reviewers, Marques Brownlee (known as MKBHD), sent its stock plummeting after calling its flagship vehicle “the worst car” he’s ever tested.

• Brownlee’s review has garnered over 4M views, coinciding with a more than 50% drop in the stock price since its release.

• The negative review has caused upheaval at Fisker, with the company promising to push a new software update to make the vehicle “markedly better.”

History repeats itself: Fisker Automotive was one of America’s first plug-in hybrid and EV companies, but it went bankrupt in 2014 after failing to sell its first hybrid car, the Fisker Karma. Despite a restart by Henrik Fisker in 2016, the company is once again in troubled waters, given the exodus of executives and going concern warning. We may already know how this story ends — after all, it already happened a decade ago.

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Markets & Economy

TSMC ($TSM) is once again a top-10 most valuable company: Last week’s 14% rally pushed the chipmaker’s market cap to ~$634B and into the top ten for the first time since 2020. Analysts expect the arrow to keep pointing up as breathless AI hype continues. [Read]

Toll evasion costs governments millions: From mechanical devices that obscure your driver tag to covering license plates with facemasks, drivers are getting creative as they duck highway cameras to avoid fares — to the tune of $20M+ lost in toll revenue for New York’s MTA in 2023 due to obscured plates. [Read]

Smaller stocks are powering this year’s hot market: Don’t just thank the Magnificent Seven for your pretty portfolio. A wider range of stocks, including promising small-caps like chipmaker Super Micro Computer ($SMCI) and even meme stocks like Carvana ($CVNA), are helping the good times roll. [Read]

Business & Wealth

Oppenheimer dominates Oscar night: Christopher Nolan’s opus snagged seven statues, while quirky steampunk epic Poor Things earned four awards. Martin Scorsese’s 3.5-hour (!) historical drama Killers of the Flower Moon went home empty-handed despite ten nominations. [Read]

More Americans are using their 401(k) as an emergency fund: While it’s technically meant for long-term saving, a record 3.6% of plan participants withdrew funds early in 2023 — a sign of the strange economic crossroads we’re at. Retirement plans are flush thanks to an impressive stock market, but housing and grocery costs are sky-high in the present. [Read]

The internet’s hottest passive income scheme is… vending machines? All you need to do is buy a used vending machine for ~$1.5K, load it up with snacks, and then count your millions. (Well, not really: the average vending machine makes ~$525/month, so you may need to get creative.) [Read]

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DIGIT OF THE DAY

One Dose of LSD Shows Significant Improvements In Anxiety — And Wall Street Wants In

Every year, nearly 10% of US adults are impacted by depressive illnesses, while 18% of those aged 18-54 wrestle with anxiety disorders. This mental health burden cost the US economy an estimated $236B in 2018, up 35% from 2010. In response, states like Oregon and California have weighed how to decriminalize psychedelics. But even without clear regulations, research continues to advance.

• Last week, Mind Medicine ($MNMD) received FDA breakthrough status for MM120, an LSD treatment for generalized anxiety disorder.

• The study found that a single dose of MM120 improved generalized anxiety disorder for 65% of patients within 12 weeks — and phase three trials are expected to begin in the second half of 2024.

Business of microdosing: Millions of people already microdose psychedelics to expand their minds and open themselves up to new ideas — and that’s caught the attention of Wall Street. Psilocybin use has become increasingly popular among executive coaches, who use it to optimize financial sector employees’ performance. Last year, billionaire investor Steve Cohen bought an 8.1% stake in psychedelics company Cybin ($CYBN). However, there are some drawbacks: psychedelic use came with a surge in hospital visits — increasing by 54% between 2016 and 2022.