Shares of Beyond Meat extend 150% surge of IPO

By IPOsFOXBusiness

Why Bill Gates and NY Met David Wright are going meatless

Billionaire Bill Gates and New York Mets captain David Wright see money in a meatless venture that’s sweeping the country.

Shares of plant-based meat startup Beyond Meat on Friday extended its first-day surge on the Nasdaq Composite, signaling keen investor interest in an emerging market for food producers.

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The Los Angeles-based corporation's stock soared more than 150 percent Thursday in its market debut, giving the startup a market value well above $3.5 billion.

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The stock opened at $46, which nearly doubled its expected IPO price of $25 per share and well above its first price range of $19 to $21 a share. Late Wednesday, the El Segundo, California, company had priced its IPO price on the high end of its range at $25.

By Friday morning before the opening bell, the stock's futures had surged more than 15 percent before paring some of that increase.

TickerSecurityLastChange%Chg
BYNDBEYOND MEAT INC.151.95-2.02-1.31%

According to a regulatory filing with the Securities and Exchange Commission, Beyond Meat plans to invest the money it raises into new manufacturing facilities, supply chain capabilities, and marketing initiatives.

According to the filing, the company said it has experienced strong sales growth over the past few years, increasing its net revenues from $16.2 million in 2016 to $87.9 million in 2018, a 133 percent compound annual growth rate and a 170 percent increase from 2017. The net loss was around $29.9 million in 2018. Underwriters for the IPO include Goldman Sachs, J.P. Morgan, Credit Suisse and Merrill Lynch.

Founded in 2009 by Ethan Brown, who has remained as the company's CEO, the alternative meat maker has gained popularity with not only customers but tech billionaires and star athletes.

Early investors in the company include Microsoft co-founder Bill Gates, Twitter co-founder Biz Stone and former New York Mets captain David Wright.

Wright told FOX Business that the opportunity to invest in a food company with a mission to positively impact the food industry and the planet "really excited" him.

In 2016, Tyson Foods announced it invested a 5 percent stake into the company in an attempt to offer its consumers more choices. Former Tyson Foods CEO Tom Hayes told FOX Business that he sees plant-based protein being a big part of the food industry’s future. However, last year, Tyson Ventures decided to sell its investment with the company ahead of its debut.

A spokesperson for Tyson Foods said while it was very "pleased" with its investment, it decided the time was right to exit its investment.

Other retailers including Whole Foods, Kroger, and restaurant chain TGI Friday’s have also formed partnerships with the vegan meat maker.

Brown told FOX Business in 2016 that despite critics of the products, its meat is still meat, but it’s just made directly from plants.

“Think of it as an innovation in meat, essentially,” he said.

Brown said the process works by running plant matter through a biological system to make meat.

“What we have done is figure out a way to take those same type of materials from plants and run them through a process of heating, cooling and pressure to create a piece of meat. So, you’re getting essentially the same things in terms of proteins, fats and water, but it’s coming directly through a system that comes from plants versus going through the animal,” he added.

And, while the outcome is the same, so is the taste, according to Brown, minus “all the cholesterol, hormones and other ‘junk’ found in meat products.”

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But Beyond Meat isn’t the only company developing meat substitutes that resemble real meat. Impossible Foods and Memphis Meats are other startups creating meat products without using animals.

According to research firm MarketsandMarkets, the global market for meat substitutes is expected to grow steadily from an estimated $4.6 billion in 2018 to $6.4 billion by 2023.