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John Naronha

Why did shares of Beyond Meat slump in spite of robust sales in the second quarter?

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Beyond Meat’s (NASDAQ:BYND) second-quarter sales jumped almost four times to $67.3m from $17.4m a year back, but the company’s loss extended to $9.4m or 24c a share, from $7.4m during the corresponding period, beating FactSet consensus on revenue of $52.5m and losses of 9c a share. The sharp growth in sales was led by the protein-based alternative meat company advancing its foodservice points of distribution, adding new strategic customers and expanding sales of its primary offering, Beyond Burger. Following the earnings announcement, shares of the company fell 5.44% to settle at $222.13 on the NASDAQ on Monday as investors booked profits after a dream run with prices of the stock climbing as much as nine times from its IPO price of $25 a share. However, shares slumped more than 14 per cent in extended trading after the company said that it plans to sell an additional 3.25m shares in the secondary markets at an undisclosed price. Beyond Meat’s close to 900% rally has led to a horde of short-sellers betting against the astronomical gains in the stock in just over two-months. Based on data from analytics firm S3 Partners, shares of Beyond Meat were commanding a borrowing fee of 135.9% on Monday, with new borrowers being charged 150% of the stock price.

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