CELH shares fall: Texas AG investigates Celsius over Alani Nu child safety claims

Investing.com -- Celsius Holdings (NASDAQ: CELH) shares fell 4% Thursday after Texas Attorney General Ken Paxton announced an investigation into the company over its energy drink marketing practices.

The probe focuses on whether Celsius and its subsidiary Alani Nutrition are misleading consumers about the safety of their energy drinks for teens and children. Paxton’s office is examining potential violations of the Texas Deceptive Trade Practices Act

The investigation centers on Alani Nu, an energy drink containing 200 mg of caffeine per 12-oz can, which medical professionals consider dangerous for children and adolescents. The attorney general’s office raised concerns that the brand uses colorful packaging, playful design elements, and youth-oriented branding strategies that appeal to younger consumers.

According to the announcement, Alani Nu’s packaging typically lists only the caffeine amount without additional warnings related to age or potential heart-health risks. The National Institutes of Health advises against energy drink consumption by children and teens, citing risks including elevated heart rate, heart palpitations, high blood pressure, anxiety, and dehydration.

The probe follows a lawsuit filed by the family of a 17-year-old from Weslaco, Texas, who died from an enlarged heart allegedly caused by excessive caffeine consumption after drinking Alani Nu. The lawsuit claims the product failed to provide adequate warnings about its caffeine content.

Celsius acquired Alani Nutrition, which produces the Alani Nu energy drink line. The attorney general’s office stated it will investigate whether the companies misled consumers regarding product safety for younger populations.

You May Also Be Interested In

• Celsius Holdings (CELH) PT Lowered to $48 at Morgan Stanley
• SpaceX slides, tech stocks dip — what’s moving markets
• Exclusive: ESS Tech speeds up sodium-ion development on $1bn opportunity pipeline