Beyond Meat shares sink on IPO lockup expiration after earnings boom - Josh Loe

Beyond Meat shares sink on IPO lockup expiration after earnings boom


  • Beyond Meat investors who bought in pre-IPO are on Tuesday able to take profits on the shares’ surge since its listing date. That’s sending the stock plunging in premarket trading. 
  • Beyond Meat’s shares have soared since IPO, rising 57%. 
  • The plant-based company said that sales rose 250%, which CNBC says outpaced analyst estimates, and the company raised its revenue projection for the year. 
  • View Business Insider’s homepage for more stories.

Beyond Meat’s shares are sinking in premarket trading, as investors locked into its shares following its IPO surge are free to sell them starting on Tuesday. 

“Despite coming off its highs, valuations still look remarkably steep and now will be seen by many pre-IPO investors as the time to cash out,” said Neil Wilson, chief markets analyst at Markets.com. “Although it’s got the hype, rising competition means Beyond Meat does not have the vegan meat market all to itself.”

Shares were down 9.4% at 8:30 a.m. in London (5:30 a.m. EST) in premarket trading. The lockup period — or time period when investors who bought into the stock pre-IPO are unable to sell it — expires on Tuesday. 

Since the IPO in May the company has risen rapidly, with the shares at one point 257% higher than when the company first went public. Since July, that rise has slowed but shares are still roughly 60% higher. 

The plant-based food company beat expectations in its third-quarter earnings — recording $92 million in sales versus the $82.2 million expected, according to CNBC, which said the company also outstripped earnings per share targets, achieving 6 cents compared to the 3 cents expected.

The company also raised its full-year guidance. 

The company has also created a number of high-profile partnerships in the last few months, and lately looked to have secured McDonald’s as a partner with its plant-based burger, which so far has only had a soft launch in Canada. 

If the burger performs well there, it likely will be rolled out further.

The results “reflect continued momentum across our business and mark an important milestone as we achieved our first ever quarter of net income,” said Ethan Brown, Beyond Meat’s president and CEO, in a statement.

“We remain focused on expanding our distribution footprint, both domestically and abroad, building our brand, introducing new innovative products into the marketplace, and bolstering our infrastructure and internal capabilities to fuel our future growth.”

Rivals within the plant-based meat world are emerging, with Impossible Meat the current main challenger.

Burger King will be rolling out a new plant-based burger in Europe according to Bloomberg, made by Vivera, a Dutch producer.

 

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