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Beyond Meat reverses course after slipping below IPO price

Reuters . California
14 May 2022 00:00:00 | Update: 14 May 2022 00:54:38
Beyond Meat reverses course after slipping below IPO price
Products from Beyond Meat Inc, the vegan burger maker, are shown for sale at a market in Encinitas, California, US – Reuters Photo

Shares of Beyond Meat (BYND.O) reversed course to gain as much as 12per cent in volatile trading after opening below their initial public offering price for the first time on Thursday following the vegan meat maker’s bigger quarterly loss.

Shares tumbled as much as 22per cent to a record low of $20.50 and below the 2019 IPO price of $25. Trading in the stock was halted multiple times in the first hour.

At 10:58 a.m. ET, Beyond Meat was up 7per cent, mirroring the broader market that flipped course to trade higher. Beyond Meat has seen its fortunes plummet in recent quarters as it battled increasing competition and surging inflation that has led Wall Street to fret over the possibility of the company needing more cash.

“They’ve got over $700 million in cash so they’re not going bankrupt. The stock is down 87per cent from its high and I think people are saying at this level maybe I give it a shot,” Thomas Hayes chairman Great Hill Capital in New York said.

“It’s got enough margin of safety.”

Products from Beyond Meat Inc, the vegan burger maker, are shown for sale at a market in Encinitas, California

Products from Beyond Meat Inc, the vegan burger maker, are shown for sale at a market in Encinitas, California, U.S., June 5, 2019. REUTERS/

In the first quarter, cash used for operations surged to $165 million from about $31 million a year ago, as the plant-based meat pioneer diversified its product range.

“Beyond Meat’s cost structure may be out of whack, and cash may run out by the end of next year,” J.P. Morgan’s Ken Goldman said.

“We worry that management’s outlook is a bit out of balance with current realities.”

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