Shares of Beyond Meat slumped to a record low on Monday after the maker of plant-based meat launched an exchange offer for convertible bonds to cut more than $800 million in debt.
The stock was last down 32.1% at $1.93, after falling as low as $1.23.
The company last month posted a revenue drop and a wider-than-expected loss, citing weak U.S. consumer demand. It said it was still facing “an elevated level of uncertainty” and will not provide any full-year estimates.
Consumer spending has been affected by economic uncertainty and consumer tastes have been shifting in the plant-based meat market.
The company will exchange its $1.15 billion 0% convertible notes due 2027, with up to $202.5 million of new convertible payment-in-kind 7% notes due 2030, along with 326 million shares of its common stock, according to a filing on Monday. Payment-in-kind means Beyond Meat will be able to pay interest with additional debt instead of cash, with the payment-in-kind notes paying interest at a 9.50% annual rate.
The exchange offer is meant to sharply reduce leverage and extend maturity to support Beyond Meat’s long-term vision of being a global plant protein company, President and CEO Ethan Brown said in a statement on Monday.
The filing showed about 47% of holders of the 2027 notes have already agreed to the exchange offer, while other creditors have until October 28 to accept the offer.
Following Beyond Meat’s results, TD Cowen analysts said in an August note that the management and board have recognized the “existential threat facing the business and are taking steps to preserve cash and stabilize sales.”
However, they recommended selling the stock, noting that the company’s fragile financial situation and weak demand for meat alternatives create too much risk.
Of the nine analysts who cover Beyond Meat, three have a “hold” rating on the stock and six have a “sell” or “strong sell” rating, according to LSEG.
Beyond Meat’s stock is down about 50% for the year to date.
Additional reporting by Lance Tupper
—Caroline Valetkevitch, Reuters