Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Vegan burger maker Beyond Meat sizzles in market debut

Published 02/05/2019, 17:53
Updated 02/05/2019, 17:55
© Reuters. Ethan Brown, founder and CEO, Beyond Meat, and guests ring the opening bell to celebrate his company's IPO at the Nasdaq Market site in New York
MSFT
-
GS
-
CSGN
-
TSN
-

By Bharath ManjeshR

(Reuters) - Shares of vegan burger maker Beyond Meat Inc surged 84 percent in their market debut on Thursday, as investors look to cash in on the growing popularity of veganism.

The stock opened at $46, well above its IPO price of $25, giving Beyond Meat a market capitalization of around $2.75 billion (£2.11 billion), including underwriters' option.

Shares surged to $50 just minutes after starting to trade and were halted due to volatility. It has since resumed trading.

Earlier on Tuesday, the company raised the size and price of its offering after increased demand from investors. The IPO raised $240 million.

The money raised from the IPO gives Beyond Meat firepower to compete with its chief rival and Silicon Valley startup Impossible Foods.

Plant-based substitutes for meat have been gaining popularity as more people shift towards vegan or vegetarian diets, amid growing concerns https://reut.rs/2Dri7JQ about animal welfare and the environmental hazards of intensive animal farming.

Burger King and Impossible Foods last month started selling their vegan burger Impossible Whopper in 59 stores in and around St. Louis, Missouri.

Los Angeles-based Beyond Meat began selling its plant-based burger at fast-food chain Carl's Jr in January.

The company said it intends to use a bulk of its IPO proceeds for research and development, as well as building manufacturing facilities.

Beyond Meat creates substitutes for meat by using ingredients that mimic the composition of animal-based meat, like proteins from peas, faba beans and soy, that look and cook like beef or chicken.

Investors in Beyond Meat include Microsoft (NASDAQ:MSFT) founder Bill Gates and actor Leonardo DiCaprio. Beyond Meat's existing stockholders did not sell any shares in the offering.

Tyson Foods Inc (NYSE:TSN), the no. 1 U.S. meat processor, owned a 6.5 percent stake in Beyond Meat, but last week said it sold its holding, as it looks to develop its own line of alternative protein products.

Beyond Meat's net loss narrowed marginally to $29.89 million in the year ended Dec. 31, from $30.38 million a year earlier. Net revenue more than doubled to $87.93 million in the same period.

The company warned it may never turn a profit and expects higher expenses as it looks to expand its footprint.

© Reuters. Ethan Brown, founder and CEO, Beyond Meat, and guests ring the opening bell to celebrate his company's IPO at the Nasdaq Market site in New York

Goldman Sachs (NYSE:GS), J.P.Morgan and Credit Suisse (SIX:CSGN) are the lead underwriters to the IPO.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.