Beyond Meat Supplies!
The coronavirus is saving lives; farmyard lives. The largest slaughterhouses and food plants in North America have closed, resulting in 25% of pork production and 10% of meat production being lost.
The market is betting that demand doesn’t diminish, and that meat won’t keep. In an undersupplied scenario, shops raise prices, and this might be good news for plant-based upstarts trying to break into the meat market and get a look in from non-veggie consumers. Beyond Meat has reversed all its coronavirus losses and then some.
The stock gained hundreds of percent after its initial public offering (IPO) popped last year. Its growth story sparked the imagination as plant-based positions became popular among ethical investors, and it soon took on a 20-billion-dollar valuation fitting for a giant of the meat sector.
It was way too early for that, though, so the bubble deflated and Beyond Meat found support at today’s levels. Now, 28% of the current float bets against the stock, 7% of the Invstr community.
The recent rally has been compounded by Starbucks partnering with the company to help it launch in China. This has happened sooner than expected, and the firm looks well-funded, too. But there are some snags with the whole “meatless meat for meat” thesis.
More than half Beyond Meat’s sales are made in restaurant kitchens, not supermarket aisles. There are no diners open, and the sector might not rebound instantly due to hiring lag and cautious consumer behavior.
The public also doesn’t have the cash to burn on the highest-quality meat products at the moment, so demand has probably fallen in tandem with supply. The plant-based stuff is actually still more expensive, so have the short-sellers got this one right? It’s close!