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Shares of Beyond Meat plunged 20% on Tuesday after JPMorgan, one of the banks behind its stock market debut, warned that the dramatic rally in recent weeks had left the meat supplier dummy vulnerable to disappointing investors.
This fall marks a sudden change of direction for a title that had been multiplied by more than seven since its launch in early May and offers a respite to short sellers who have been battered by its meteoric rise.
JPMorgan badyst Ken Goldman on Tuesday reduced his perspective on the company from "neutral" to "neutral". He added that the company's "extraordinary earnings and profit potential" had been taken into account after the nearly 70% rise in equities over the past two days, following optimistic quarterly results and optimistic outlooks for 2019. .
"This degradation is purely a call for evaluation," he said. "With such a high valuation, any performance interruption – real or perceived – could result in a significant correction in the price of the stock," he said.
The movement of Mr. Goldman left the action with a single note "purchase", eight notes "withholding" and zero note "sale" on Wall Street, according to Bloomberg data.
Veggie Burger shares fell 22.5% to $ 130.29.
The slide is a relief for the bears Beyond the meat. About 5.88 million shares – representing about half of its float – are on short-term debt lending, in which investors are betting on a declining share, according to data badytics group S3 Partners. Short sellers of Beyond Meat had lost $ 581 million so far on Monday but are recovering $ 201 million from their losses on Tuesday, according to Ihor Dusaniwsky's calculations of S3 Partners.
Despite falling Tuesday, stocks remain above 450% of their bid price of $ 25, while the appetite for Beyond Meat has increased and its revenues have more than tripled to $ 40.2 million. dollars in the first quarter. The California company anticipates strong demand this year and expects its net revenues to grow more than 140% from the previous year, to more than $ 210 million.
Investors are optimistic about the outlook for the company, with consumers increasingly opting for healthier and greener alternatives to meat. Some badysts have predicted that the market for herbal meat substitutes could reach $ 100 billion in 15 years.
However, the company faces fierce competition from new competitors and traditional consumer food groups seeking to capture a share of the market. Impossible Foods has a distribution agreement with Burger King, while the Nestlé packaged goods company has also launched meatless burgers.
The success of Beyond Meat stands in stark contrast to the many other companies that have rushed into public markets this year. Its post-launch participation rate of 163% was the largest since the financial crisis. Zoom Video Communications is the only other name to have been so successful, up almost 72% when it opened and 165% since its IPO.
However, Lyft and Uber shares have fallen by 4.3% and 19.7% respectively since their long-awaited IPO, due to issues of unprofitable industry indifference and investors' cunning. trade fears between the United States and China.
Beyond Meat has a market capitalization of approximately $ 8.1 billion, ahead of the S & P 500 companies such as Harley-Davidson and TripAdvisor. An important test for Beyond Meat comes on October 29, at the end of the 180-day lock-in period, allowing insiders to start selling shares.
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