Beyond Meat shares drop below $1 on investor concerns
Beyond Meat Shares were trading below $1 on Tuesday as investors worried about the company’s plans to reduce debt by issuing more shares.
This was more bad news for the plant-based meat producer. struggling with weak demand for their burgers, sausages, tenders and other items. Beyond Meat’s net revenue fell 15% in the first six months of this year.
El Segundo, California-based Beyond Meat said Monday that most of its convertible bondholders have agreed to a plan that would help the company reduce its debt load by $800 million and extend the time until the debt matures.
Under the plan, Beyond Meat swapped debt due in 2027 for $202.5 million in debt due in 2030. The company also announced that it will issue up to 326 million new shares. This shook investors as it would reduce the value of existing shares.
Shares of Beyond Meat closed at $1.04 per share on Monday. Shares of Beyond Meat opened at 92 cents on Tuesday and were down 12% by midday.
Companies listed on Nasdaq must not allow their shares to fall below $1 for 30 consecutive days, or they may eventually find their shares delisted. Beyond Meat’s shares have lost 73% of their value since the beginning of this year.
Beyond Meat was the darling of the plant-based meat industry. opened to public Listed on the Nasdaq exchange in 2019, the company had attracted the attention of famous investors such as: Microsoft co-founder Bill Gates and actor Leonardo DiCaprio had big plans to expand abroad.
But U.S. demand for its products never really took off. Consumers were not thrilled with the flavor or the long list of ingredients, and cost increases due to inflation further hurt the company. Beyond Meat introduced a healthier version It increased the number of its signature burgers in 2024, but that did not increase U.S. sales.
Demand is higher in Europe McDonald’s It sells Beyond Meat’s plant-based burgers and nuggets. However, US fast food chains are reluctant to add Beyond Meat products to their menus. Beyond Meat also suspended operations in China earlier this year due to weak sales.
During a conference call with investors in August, Beyond Meat founder and CEO Ethan Brown said the company plans to increasingly use “Beyond” as its primary brand and move beyond animal meat replicas to other protein offerings.
