Beyond Meat Pukes In Pre-Market Amid Downgrades, Lock-Up Expiration

Update (0815ET): Amid mass downgrades this morning, it appears the lock-up-expiration-driven selling has accelerated as BYND shares are down 20% in the pre-market, back at 5-month lows.

Jefferies, Wells Fargo and JPMorgan were among banks that lowered price targets on the stock, according to Bloomberg data.

Under the lockup arrangement, about 75% of shares outstanding become eligible for sale today, according to an Oct. 28 note from Sanford C. Bernstein. Beyond Meat was already down 29% month-to-date ahead of the expiry.

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Did the fake meat bubble just burst for real?

Despite a revenue beat and guiding higher than expected, BYND shares plunged after hours to 5-month lows...

The headlines look great:

  • 3Q EPS +6.0c vs. loss/share 24.00c q/q - first profitable quarter

  • 3Q net revenue $92.0 million, +37% q/q, above estimate $82.2 million

  • 3Q adjusted Ebitda $11.0 million, +60% q/q, above estimate $6.77 million

And looking forward, the company raised guidance:

  • BYND sees FY net revenue $265 million to $275 million, saw above estimate $262.4 million.

  • BYND sees FY adjusted Ebitda $20 million, above estimate $14.3 million

But, while the shares remain in the red afterhours, they are extremely volatile...

CEO Ethan Brown:

We are very pleased with our third quarter results which reflect continued momentum across our business and mark an important milestone as we achieved our first ever quarter of net income.”

“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.”

One potential explanation for the weakness is that investors could be locking in gains ahead of expected weakness on the lockup expiry tomorrow.