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Burgers, bubbles and Beyond Meat's wild ride

Kevin Dowd

Over the past month and a half, few stocks have sizzled like Beyond Meat, a maker of vegan burgers and other meatless proteins that conducted a VC-backed IPO at the start of May. A steady climb in share price continued almost unabated, and the company's market cap continued to balloon. 

The growth reached truly jaw-dropping levels in the wake of Beyond Meat's first earnings report last Friday, with the price of shares jumping nearly 70% in just two trading days. As of Monday night, the company's valuation had grown by more than 600% in about six weeks, creating incredible profits for a handful of backers—and prompting headlines like " Beyond Meat stock may be a gigantic bubble." 

Tuesday, however, brought a potential return to reality. Shares in Beyond Meat (NASDAQ: BYND) closed the day down 25%, at $126.04 per share, after a JP Morgan analyst downgraded the company's stock, arguing Beyond Meat's potential for stratospheric growth is at this point already priced into its shares. It was the third straight day of extremely volatile trading for the California-based business, following a 39% increase last Friday and a 21% leap on Monday. 

It's been an up-and-down saga that's in some ways stolen the spring IPO spotlight away from more heavily hyped companies like Lyft and Uber, whose arrivals on the public market have so far met a much more muted response. Beyond Meat's debut seemed to come at the perfect time, as its products have begun to spread across the fast-food industry and a wide swathe of consumers has shown an increased appetite for plant-based meat alternatives of several sorts. 

Beyond Meat priced its IPO at a modest $25 per share back on May 2, only to see that figure rocket up to $65.75 by the end of its first day. We built a datagraphic with much more info on the listing. Within two weeks, Beyond Meat stock was trading above $80 per share, and it closed above $100 for the first time on the final day of May. Last Friday, the company reported that it expects to generate 2019 revenue of $210 million, exceeding analyst expectations; that would mark a major leap from $87.9 million in revenue recorded last year. At one point Monday, Beyond Meat's market cap topped $10 billion. 
 
Even with Tuesday's plunge (the company closed the day with a $7.58 billion market cap), that represents incredible growth for Beyond Meat in a matter of mere months. It was valued at $1.35 billion last November with a $50 million round of VC funding, its first time reaching unicorn levels after several years of steady growth. In the decade between its 2009 founding and its May IPO, Beyond Meat raised nearly $200 million in total venture backing. 

Among the most significant sources of that backing was Kleiner Perkins, which first invested way back in 2012. It retained a post-IPO stake in Beyond Meat of more than 7.7 million shares, per an SEC filing, accounting for about 13% of the company. Between the May listing and this Monday, the value of those shares had increased by more than $1.1 billion. 

Tuesday's turn of events knocked a couple hundred million off that figure, of course. Yet the fact that such a thing could happen and be anything other than a catastrophe is a testament to just how nuclear Beyond Meat's growth has been. 

Maybe the massive stock fluctuations will continue in the months ahead, and maybe they won't. One thing's for certain, though: Beyond Meat's first few weeks as a public company have been anything but boring. 

Featured image via ivan101/iStock/Getty Images Plus
 

Related read: Examining the aftermath of 2019's unicorn IPOs