Meat substitutes for vegetarians: a success in the stock market

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The American company Beyond Meat, which specializes in substitute products of meat out of vegetable origin, has pleasantly surprised the stock market

Last May there was a lot of action in the New York Stock Exchange. Uber monopolized the headlines when it stopped being the best valued private company in the world to become another technological giant listed on the stock market. Its rival in the transport industry, Lyft, had hit the stock market a couple of months earlier, but with modest results. Few could foresee, however, that a company dedicated to the manufacture of vegetable substitutes for meat could get so much attention on a Wall Street that did not lack big names for investment.

Leer en español: Sustitutos de carne para vegetarianos: un éxito en la bolsa

The name of this company is Beyond Meat and they sell themselves as 'the future of protein'. Its founder, Ethan Brown, grew up around animals on his father's farm and, from a young age, began to question the practices of the meat industry. Years later, in 2009, Brown founded his company in California, receiving abundant investment and attracting venture capital from Bill Gates, Twitter, and KPCB.

At first, they only commercialized vegetable imitations of chicken meat, but eventually they managed to produce a substitute for beef. Its best-known product, 'The Beast Burger', is a hamburger based on vegetable proteins of rice, pea, and beans, and was the first vegetable burger to be included in the meat section of supermarkets.

Only successes in the stock market

So far in 2019, no company has performed better than Beyond Meat in the stock market. For its investors, this company could not have had a better start.

His initial offer was made on May 2 and established that its shares would start trading at $ 25 dollars each. After starting the day and opening its initial public offering, the shares were already quoted at $ 46 dollars and ended up costing $ 65.75, a growth of 163%.

The first day was so good that, according to Fortune, it was the best offer on the US stock market with a collection of at least $ 200 million since the 2008 crisis. Beyond Meat beat Silk Road Medical Inc., which had registered the best of the year until then, with an 80% increase during its first day.

That day in May, it raised $ 241 million dollars from the sale of 9.63 million shares. Again, it attracted high profile investors like Bill Gates and actor Leonardo DiCaprio, who surely helped bring media attention.

Since then, more of the same

Since its initial public offering, Beyond Meat has not stopped convincing. It continues to record positive growth and the share price continues to rise: 250% since it entered the market on May 2.

For Beyond Meat, the figure is particularly encouraging, considering that they have achieved these incredible results despite the worrying panorama that has discouraged optimism in the investment. As a comparison, Uber and Lyft, the two most anticipated offers of the year, have already lost billions since they went public. Uber's share has fallen 12% since its debut on May 10, and Lyft's 22% since March 29.

Also read: Is there any winner in the 'Technologic Cold War'?

Nowadays, Beyond Meat is valued at $ 5,000 million dollars, $ 1,200 million above what it was worth at the end of their first day on the stock market. They have had other spectacular days, as it was last Thursday, when their quarterly results were made public and the stock rose 26%.

The success of Beyond Meat shows that there is more interest than was thought for meat substitutes based on vegetable protein. The market is still raw and there are few competitors, but Beyond Meat, which according to Bloomberg will sell more than $ 210 million dollars during the year, is already positioned to be the strongest competitor in this nascent industry.

LatinAmerican Post | Pedro Bernal

Translated from "Sustitutos de carne para vegetarianos: un éxito en la bolsa"