Beyond Meat went public at $25. It’s now trading around $200

Posted at 7:54 AM, Jun 18, 2019
and last updated 2019-06-18 09:54:40-04

Fake meat may be a real bubble. Shares of Beyond Meat surged nearly another 10% in early trading Tuesday after the plant-based protein company announced plans to start selling “ground beef” in grocery stores.

Beyond Meat stock opened at just above $200 a share — a more than 700% gain from its initial public offering price of $25. The company now has a market value of $11 billion.

The stock plunged briefly last week after an analyst at JPMorgan questioned the company’s valuation, saying that Beyond Meat stock had moved “beyond our price target.”

But Beyond Meat has come roaring back after the company announced that it would start selling a new patty that looked even more like real meat as well as plans for a ground version of its plant-based protein and a partnership with Tim Hortons to sell sandwiches with a Beyond Meat breakfast sausage.

Still, many analysts remain skeptical about Beyond Meat on Wall Street. The company is not yet profitable and reported just $40 million in quarterly sales earlier this month.

Beyond Meat’s stock is also a favorite target of short sellers, who borrow the stock and sell it with the hopes of buying it back at a lower price and pocketing the difference when they return the shares.

Shorts have to buy the stock back quickly or risk mounting losses. So the rising Beyond Meat price has created what’s known as a short squeeze — a panicked rush to buy the stock before it moves even higher. That has helped drive up the price.

Beyond Meat faces a host of competitors too, including meat giant and former investor Tyson Foods and fellow startup Impossible Foods. Impossible has partnered with Tim Hortons corporate cousin Burger King on an Impossible Whopper.