What Happened?
Shares of plant-based protein company Beyond Meat (NASDAQ:BYND) jumped 11.1% in the morning session after the stock rebounded from a sell-off earlier in the week that was caused by a delay in its third-quarter earnings report. The plant-based meat company’s stock had previously plummeted after it abruptly announced it was rescheduling its earnings report. Compounding the negative sentiment was the company's preliminary third-quarter guidance, which confirmed stagnant revenue of $68 to $73 million, a drop from $81.01 million in the prior-year period. However, some positive news emerged as Beyond Meat announced a new partnership with Hard Rock Cafe, allowing diners to swap any burger for a plant-based patty. The rebound suggested some investors may have been buying the stock at a lower price following the sharp decline.
After the initial pop the shares cooled down to $1.24, down 2% from previous close.
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What Is The Market Telling Us
Beyond Meat’s shares are extremely volatile and have had 65 moves greater than 5% over the last year. But moves this big are rare even for Beyond Meat and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 8 days ago when the stock dropped 7.8% on the news that it announced the final results of a debt exchange offer that included the potential issuance of a large number of new common shares. The company finalized a deal to swap its 0% Convertible Senior Notes due in 2027 for new 7.00% convertible notes due in 2030 and up to 326.2 million new shares of common stock. The plan to issue such a large number of new shares likely concerned investors because it could significantly dilute the ownership value for existing shareholders. This financial restructuring came at a time when the company's performance had already been struggling. In a previous quarter, the company's CEO, Ethan Brown, admitted disappointment with the results as sales had fallen nearly 20% year over year, and adjusted earnings were negative.
Beyond Meat is down 67.9% since the beginning of the year, and at $1.24 per share, it is trading 81.2% below its 52-week high of $6.58 from November 2024. Investors who bought $1,000 worth of Beyond Meat’s shares 5 years ago would now be looking at an investment worth $7.87.
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