Beyond Meat’s stock collapsed to near $1 a share on Tuesday after the embattled plant-based meat maker finalized a debt exchange deal that handed bondholders hundreds of millions of new shares — effectively wiping out most existing investors.
Shares plunged almost 50% on Monday to close around $1.10 and hovered between $1.03 and $1.10 in Tuesday trading, down more than 76% this year and deep in penny stock territory.
In the summer of 2019, the stock neared $240 a share — its peak price. Since then, the stock has lost more than 99% of its value.
The free fall followed an announcement that nearly all of Beyond Meat’s creditors had agreed to swap existing notes for new debt due in 2030, a move that will sharply dilute current shareholders.
The California-based company, once valued at more than $14 billion after a blockbuster 2019 IPO, said 97% of bondholders accepted the exchange offer.
Beyond Meat will issue roughly $208.7 million in new 7% convertible notes due 2030 and as many as 316 million new shares, replacing its 0% notes due 2027.
The company had just 76.6 million shares outstanding before the deal, meaning existing investors face a dilution of more than 300%. If all bondholders convert their notes, they will own about 88% of Beyond Meat’s equity, according to filings.
The early settlement is scheduled to close Oct. 15 after the company surpassed the minimum participation threshold of 85%, Reuters reported.
While the exchange gives Beyond Meat more time to pay down roughly $1.3 billion in debt, it triggered a massive sell-off as traders reacted to the dilution and persistent losses.
The company’s market capitalization has shriveled to under $80 million — a fraction of the $3.8 billion valuation it commanded at its IPO six years ago.
Shares have now fallen for four straight years, according to LSEG data.
Beyond Meat said the debt restructuring was designed to reduce more than $800 million in obligations, but Wall Street analysts expressed skepticism the company can stabilize sales or regain investor confidence.
TD Cowen on Tuesday lowered its target price from $2 to 80 cents and reaffirmed a “Sell” rating, one of several negative calls that have driven the consensus to “Strong Sell” among analysts tracked by MarketBeat.
The company withdrew its annual sales targets in May after missing quarterly estimates. Revenue is projected to fall nearly 14% this year to about $281.6 million, LSEG data shows.
Beyond Meat’s sales have plunged amid waning consumer interest in imitation meats, particularly in the US, its largest market.
Revenue fell about 20% last quarter to $75 million as shoppers turned away from pricey, heavily processed meat substitutes that once fueled the company’s meteoric rise.
“There isn’t a lot to drive enthusiasm about the momentum of the business to offset the negative impact of the dilution,” Bloomberg Intelligence’s Jennifer Bartashus said, citing weak sales.
Short sellers have piled in, with nearly 64% of Beyond Meat’s available shares sold short, according to analytics firm Ortex — one of the highest short-interest levels among US stocks.
The plunge caps a dramatic reversal for Beyond Meat, which soared after its 2019 debut at $25 a share and opened its first trading day at $46.
The stock hit an all-time high of $239.71 that July, fueled by partnerships with McDonald’s, KFC, and Dunkin’ that promised mainstream meat alternatives.
But the hype cooled as consumers complained about taste and cost, and rivals crowded the market.
Major restaurant chains scaled back plant-based offerings, and several competitors — including Maple Leaf Foods’ Greenleaf unit and Impossible Foods’ retail arm — have laid off staff or restructured in recent years.
Beyond Meat has also battled operational challenges, high manufacturing costs, and repeated cash burn.
The company reported deep losses last year and withdrew forward guidance as its liquidity position worsened.
The Post has sought comment from Beyond Meat.
Credit: Source link
