Texas AG Probes Alani Nu’s 200mg Energy Drink After Teen Death, Celsius Shares Drop 7%
CELH•Celsius Holdings shares fell 7% after Texas AG Ken Paxton opened an investigation into its Alani Nu drinks, which contain 200 mg of caffeine per 12-ounce can and face allegations of being marketed to minors. The probe follows a lawsuit over a 17-year-old’s death linked to excessive caffeine consumption.
1. Investigation Details
Texas Attorney General Ken Paxton initiated an investigation into Celsius Holdings and its subsidiary Alani Nutrition, examining potential violations of the Texas Deceptive Trade Practices Act. The probe will assess whether Alani Nu’s packaging and marketing—featuring 200 mg of caffeine per 12-ounce can, colorful designs, and youthful branding—mislead consumers and target minors without adequate safety warnings.
2. Teen Death Lawsuit
The investigation follows a lawsuit filed by the family of a 17-year-old from Weslaco, Texas, who allegedly died from an enlarged heart linked to excessive caffeine consumption after drinking Alani Nu. The suit claims the product lacked sufficient warnings about its high caffeine content and potential heart risks for children and adolescents.
3. Market Reaction and Outlook
Celsius Holdings shares declined 7% following the probe announcement, with retail sentiment on social platforms shifting from neutral to bearish. Among 22 analysts, 19 still rate the stock at Buy or higher, sporting an average 12-month price target of $61.40, implying roughly 105% upside from recent levels.
