Plant-based meat maker Beyond Meat hits all-time low after debt swap plan

Quotes of Beyond Meat, a small-cap producer of plant-based meat backed by Leonardo DiCaprio, plunged 36% yesterday, September 29, to an all-time low after the company launched an debt swap offer to cut more than $800 million of debt.

Shares of Beyond Meat, which has been struggling financially, dropped 36% to $1.82 per share yesterday to mark the lowest close since its been a public company. In early trading this morning, the stock initially recovered about 2% before giving back the gains.

The company said it has commenced an exchange offer to restructure part of its $1.15 billion in convertible notes due in 2027. Bondholders are being asked to swap their holdings for up to $202.5 million of new notes due in 2030 and 326 million shares of common stock.

CEO Ethan Brown said the move is part of a broader transformation plan aimed at strengthening the balance sheet. The transaction would reduce Beyond Meat’s debt burden by roughly $800 million. As of June 28, the company’s total debt stood at $1.2 billion.

According to Beyond Meat, about 47% of holders of the existing notes have already agreed to participate in the swap.

The offer comes as Beyond Meat, a once promising startup with investments from Leonardo DiCaprio, is struggling with weakening consumer demand for plant-based meat substitutes in the U.S., its largest market, Bloomberg writes. For the second quarter, the company reported a nearly 20% year-over-year decline in net revenue to $75 million. “We are disappointed with our second quarter results, which primarily reflect ongoing softness in the plant-based meat category, particularly in the U.S. retail channel and certain international foodservice markets," Brown, the CEO, commented.

Against this backdrop, Beyond Meat announced a more aggressive reduction in operating costs. Specifically, the company said it would cut 6% of its workforce and appointed John Boken, who has 35 years of financial recovery experience, as interim chief transformation officer.

To bolster its operation, the company has held discussions with private credit lenders this year, and received fresh funding from a diet non-profit, Bloomberg reports.

The outlook remains dim, however. The company has yet to reach substantial and sustainable profits since it first went public in 2019. Since then it has lost 96% of its market value.

Wall Street does not have much confidence in the stock's prospects, according to MarketWatch data. The stock has five “sell” ratings from analysts and three “hold” ratings. Still, the average target price of $2.57 per share still implies 41% upside.

The AI translation of this story was reviewed by a human editor.