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beyond meatIts stock dropped below $1 on Tuesday as investors fretted over its plan to cut its debt by issuing more shares.
It was the latest blow for the plant-based meat maker Faced with weak demand for its burgersSausages, and tenders, among other products. The company’s net revenue was down 15 percent in the first six months of the year.
El Segundo, CaliforniaThe Texas-based business said Monday that the majority of holders of its convertible notes agreed to a plan to help Beyond Meat reduce its debt load by $800 million and extend the time until that debt matures.
Under the plan, the company converted the loan due in 2027 into a $202.5 million loan maturing in 2030. The company said it would issue 326 million shares of new stock. This made investors nervous, as it would reduce the value of existing shares.
Beyond Meat’s stock closed at $1.04 per share on Monday. Beyond Meat shares opened at 92 cents on Tuesday and were down 12 per cent in afternoon trading.
nasdaq-Listed companies must not let their stock fall below $1 for 30 consecutive days otherwise they may eventually delist the stock. Beyond Meat shares are down 73 percent since the beginning of this year.
Beyond Meat was the darling of the plant-based meat industry when it went public on the Nasdaq stock exchange in 2019. The company had attracted celebrity investors such as Microsoft co-founder Bill Gates and actor Leonardo Dicaprio And there were big plans to expand overseas.
But demand for its products never really increased in America. consumers were not enthusiastic about the flavor or the long list of ingredients, and inflation-related cost increases caused further losses for the company. Beyond Meat introduced a healthier version of its signature burger in 2024, but it didn’t boost US sales.
Demand has been high in Europe, where McDonald’s sells Beyond Meat’s plant-based burgers and nuggets. But American fast food chains have been reluctant to include Beyond Meat’s products on their menus. Beyond Meat also suspended its operations in China earlier this year due to poor sales.
During a conference call with investors in August, Beyond Meat founder and CEO Ethan Brown said the company planned to increasingly use “Beyond” as its primary brand and move beyond animal meat replicas toward other protein offerings.