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Beyond Meat goes public, stock soars over 100%

Beyond Meat (NASDAQ: BYND) has made its public debut on Thursday on the Nasdaq stock market. The company’s stock soared more than 100% in the afternoon trade following its debut opening at $46 per share. On Wednesday, the company priced its initial public offering at $25 per share for an implied market value of $1.46 billion.

The veggie company, which was founded in 2009 and produces burgers, sausage, crumbles and strips from the plant-based meat, plans to use the proceeds from its IPO to fund its growth. Goldman Sachs, J.P. Morgan Securities, and Credit Suisse Securities are leading the offering.

This year, Beyond Meat is the latest company to make its debut in the stock market. While companies like Levi Strauss (NYSE: LEVI) and Zoom Video Communications (NASDAQ: ZM) have succeeded since their IPOs, others like ride-share giant Lyft (NASDAQ: LYFT) have seen their stock tumble.

Image Courtesy: Beyond Meat / Facebook post

The vegan company, which was started by Ethan Brown in 2009, has been struggling in recent times and turned to the public to expand its reach and growth accumulation. The company generates revenues by selling its products like The Beyond Burger, Beyond Sausage, Beyond Chicken and other plant-based meat products to customers mainly in the US.

Beyond Meat believed the demand for its products would continue to accelerate across both retail and foodservice channels as well as internationally. Hence, the company planned to invest in innovation, supply chain capabilities, manufacturing, and marketing initiatives.

With the company turning to the public, Beyond Meat proposed to use the proceeds to invest in current and additional manufacturing facilities and expand research and development as well as sales and marketing capabilities. The proceeds would also be used for working capital and general corporate purposes, and pay fees and expenses in connection with the offering.

Also read: Beyond Meat files prospectus nine years after launch

The company will be benefited by the health-conscious people who turned to a vegan diet due to several health benefits and environmental concerns. The company believed the available market opportunity could rise. According to a Fitch Solutions Macro Research data, the meat industry is the largest category in food and in 2017 generated estimated sales across retail and foodservice channels of about $270 billion in the United States and about $1.4 trillion globally.

For the quarter ended September 29, 2018, the plant-based meat producer registered a wider loss due to higher costs and expenses despite revenue almost tripled versus the prior year quarter. The company expects to triple its monthly production capacity by the end of the first quarter of 2019.

For the quarter ended March 30, 2019, the company had expected revenues to grow by 197% to 213% year-over-year to the range of $38 million to $40 million. Loss from operations was predicted to be in the range of $7.7 million to $6.7 million. Gross margin was projected to be in the range of 25% to 26.3%.

As of March 30, 2019, the company had a long-term debt of $30.4 million and working capital of $70.4 million. In contrast, the company had cash and cash equivalents of $35.4 million.

 

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