The new offering comes after Beyond Meat shares soared more than 700 per cent from their market debut. Photo / AP
The new offering comes after Beyond Meat shares soared more than 700 per cent from their market debut. Photo / AP
Beyond Meat shares fell sharply in after-hours trading after the vegan burger maker said its early shareholders would be selling another chunk of stock, just two months after an initial public offering that was one of the hottest in recent years.
The news overshadowed strong results in which quarterly salesmore than tripled and the company raised its sales forecast for 2019.
The new offering comes after Beyond Meat shares soared more than 700 per cent from their market debut, as investors bet on rising consumer interest in meat alternatives and on the company's plans to expand through new partnerships with restaurant chains around the world.
The additional share sale would include between 3 million and 3.49 million shares from stockholders and 250,000 new shares from the company, it said. Just under 10 million shares were offered in the IPO in May.
The development sent the shares tumbling 13 per cent to roughly US$192 ($290.24) in after-hours trading, on top of a 5.4 per cent fall in Monday's official session that snapped a seven-day winning streak.
The selling shareholders include Beyond Meat chief executive Ethan Brown, venture capital firm Kleiner Perkins, food company General Mills and the Gates Frontier fund that invests money for Microsoft founder Bill Gates, according to a regulatory filing.
Beyond Meat CEO Ethan Brown at his company's IPO at Nasdaq in May. Photo / AP
Beyond Meat plans to use its own proceeds from the sale to continue to increase production and supply capabilities, it said, as well as pay for marketing and promotional activities and general working capital purposes.
The company's net loss was US$9.4 million, or 24 cents a share, in the second quarter, compared with a loss of US$7.4m, or $1.22 a share, a year earlier. The California company said the wider loss was primarily the result of a US$11.7m non-cash expense related to its IPO.
Wall Street analysts have recently taken a more cautious view following the stock's blistering run, citing the company's lofty valuation and competition from both traditional food giants and start-ups looking to capitalise on a fast-growing alternative meat market.
But Beyond Meat upped its sales forecasts on Monday. It now expects net revenue to exceed US$240m in the current fiscal year, an increase of more than 170 per cent versus 2018. Its prior outlook called for 2019 net revenue of more than US$210m.
It also said it expected positive adjusted earnings before interest taxes depreciation and amortisation for the full year, a rosier view than the break-even result it previously expected.
The company said second-quarter net revenue more than tripled year-over-year to US$67.3m, driven by new points of distribution, such as its deal to supply the Tim Hortons chain, and greater demand from existing customers. Analysts were looking for US$52.7m in sales.
Sales to food-service providers and restaurants accounted for about US$33.1m of net revenue during the quarter, it said, up from US$5.7m in the year-ago period. Net revenue from sales through retailers jumped to US$34.1m from US$11.7m.
