Beyond Meat priced its initial public offering at $25 and skyrocket 800% in less than four months. Beyond Meat, a maker of plant-based meat controls about 10% of the plant based meat market. And because they have achieved “first to market” they are the new IT THING on Wall Street.
But there valuation is beyond ridiculous. Their valuation is higher than roughly 25% of the companies in the S&P 500 index. Then in July they announced they would be selling an additional 3.25 million shares of common stock. Investors are finally starting to come to their senses as the stock was down 15% in August.
With all this hoopla, FOMO and exhaustion…this circus of a stock,
reminds me of Tilray back in 2018. In 2018, shares of Tilray, went from $17 per share in July to just over $300 in August, an increase of more than 600%. It once had a market cap of over $10 billion, but only had sales of $28 million. Many short sellers got burned as price continued to go higher, but the few that lasted made out like bandits when the stock price finally came back down to earth.
Now I’m not say Beyond Meat is the Tilray of 2019…but I’m saying. So not what valuation is out the way, lets talk about the competition because have “first to market” status does have a shelf life.
Kellogg (K) introduced “Incogmeato” earlier this week, which is a plant-based meat alternative made from non-GMO soy. Kellogg’s plant-based burger patties, Chik’n tenders, and Chik’n nuggets which go on sale in early 2020.
Also this week, Kroger said they will sell a new line of branded plant-based burgers, other meatless products like dips, pasta sauces and cookie dough in the coming months under their Simple Truth Plant Based label.
Hormel Foods once a piece of the action too and announced its plant-based meat substitute called “Happy Little Plants” is available at select retailers.
Tyson Foods, which was actually an investor in Beyond Burger, couldn’t stand on the sidelines any longer. They sold their stake in Beyond Burger and announced this past Summer that they were jumping in the game as well with their plant-based products that are sold now with a wider rollout in October and November.
Then there is Impossible Foods which launched the Impossible Burger through Burger King last month and will have product along Beyond Burger on the shelves in supermarkets starting this month.
So now that I got the competition out there way, lets go to charts. Price has broken down from a high of $240 and has formed a daily supply at $179. Thus, the chart suggests price will continue to decline to the daily demand at $100 and fill the gap in the process.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.