The plant-based meat craze may be over for one of the industry’s top companies likely on its way out. Beyond Meat (NASDAQ:BYND) stock once traded at more than $230 per share as consumers bought up its products. But years later, BYND stock has bled out almost all of its value, falling 97% since its 2019 peak.
Bad news had been steadily piling up for years for Beyond Meat and yesterday things only got worse. A report from The Wall Street Journal reveals that Beyond Meat is in talks with bondholders regarding balance-sheet restructuring. Details are still emerging, but it’s clear the company is in severe financial distress and that share prices are likely to keep falling.
What’s Happening With BYND Stock?
News of this development promptly sent BYND stock down yesterday. Since markets opened today, things have only gotten worse. As of this writing, shares are down more than 10%.
Given the severity of this recent development, it makes sense that Beyond Meat is trending downward amid rising uncertainty. After all, its future seems to be hanging in the balance. As WSJ reports:
“For the quarter ended March 30, the company’s revenue declined 18% to $75.6 million year-over-year, while it had a net loss of $54.4 million, compared with a loss of $59 million the year prior. The company said that declines in both domestic and international retail and food-service channels were driven by decreases in volume of products sold, reflecting demand softness in the plant-based meat category.”
That’s a pretty discouraging picture on its own. But WSJ also notes that the firm’s liquidity has “diminished over the past several quarters” as Beyond has continued burning through cash. This comes at a time when the company already boasts excessive debt of $1.1 billion. And as InvestorPlace contributor Faisal Humayun notes, these credit metrics could easily get worse in the near future. The company had enough problems before news broke of the bondholder negotiations. Now, investors have even more reason to approach BYND stock with extreme caution.
Beyond Meat Is About to Expire
When it comes to Beyond Meat, it’s time to face the facts. One undeniable truth is that America’s fascination with plant-based meat has been slowly diminishing for years. Earlier this year, WIRED reported that the Good Food Institute “found that dollar sales of plant-based meat and seafood in the US fell by 13 percent over the past two years.”
Sometimes demand for products rises and falls quickly only to end up disappearing. When it does, the once-prominent companies behind them tend to fizzle out. That’s exactly what we seem to be seeing with BYND stock right now. Beyond Meat has survived for some time, mostly on meme stock momentum. But even as it takes steps to restructure its balance sheet, the company’s future looks uncertain at best.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
