- Celsius stock fell more than 10% on Wednesday after the company lost a breach-of-contract lawsuit to Flo Rida.
- The rapper did marketing work for the company from 2014 to 2018 and was not paid his 1% stake in the company.
- Flo Rida initially sued Celsius for $30,000, but instead ended up being awarded $82 million in damages.
Celsius stock fell more than 10% on Wednesday after the energy drink company lost a breach-of-contract lawsuit to Flo Rida and must now pay the rapper $82.6 million.
The stock fell another 2% in Thursday’s trading session, bringing the total loss to about 12%.
Flo Rida did marketing work for Celsius back in 2014 and through 2018. Under the endorsement deal, the rapper was promised a 1% stake of the company. But Flo Rida never received that stake, and over time it soared in value as Celsius saw massive growth.
When Flo Rida signed the endorsement deal, Celsius has a market valuation of about $10 million. Today, the company is worth about $8 billion.
According to the civil complaint, Flo Rida, whose real name is Tramar Dillard, played an “instrumental part” in “launching a new era for the company’s brand development, growth, and expansion” and helped introduce Celsius to “millions around the world.”
“In Flo’s mind this was always a Vitamin Water-type of deal, he was signing on to 1% of the company of a multimillion-dollar endorsement deal and was hardly getting paid anything for it,” Flo Rida’s attorney John Uustal told Insider last month.
Flo Rida had initially sued Celsius for $30,000 in 2021, but those damages increased immensely during the trial.
A South Florida jury found Celsius guilty of breaching its deal with Flo Rida, and also found that the company fraudulently hid information from him that impacted the value of his endorsement deal.
That information had to do with the company hitting certain sales goals that were part of its original contract with the rapper. As Celsius hit those milestones, it was supposed to pay the rapper more as part of the deal. But the energy drink company never informed the rapper that the milestones were met.
The $82.6 million award to Flo Rida was worth about 1% of Celsius based on its $8.4 billion market valuation on Monday. As of Thursday, Celsius has a market valuation of about $7.6 billion.
“This was a long journey, but we prevailed. From the start, I only wanted what I worked for, nothing more, nothing less,” Flo Rida said.