This morning, after the bell, you have both the S&P 500 and DJIA nearing or exceeding one month lows. That’s a lot of red in just a few days – but it’s not the whole story.
Take a look at a recent IPO for a company that’s offering something that nobody else has – at least not in its particular incarnation.
Beyond Meat (NASDAQ: BYND) is a vegetarian burger company – its flagship products work on the idea of making non-meat edibles “meat-esque” – allowing processed plant-based foods to ‘bleed’ like ground beef, and essentially providing vegetarians and vegans with attractive dining options.
Beyond Meat went public on May Day, May 1, with a per-share price of $25, and now these shares sit around $80, a jump up of over 200%.
That’s great news for vegetarians, and for day traders who are looking at a specific sector and niche product instead of buying into an index at a time when trade concerns are tanking the general market.
However, detractors of Beyond Meat point out that the company has never made a profit, and that relatively small revenue of $87 million may not support such rapid growth.
In addition, you can find some analysts throwing a wet blanket over Beyond Meat’s hype for different reasons.
Some even tie the current veg IPO to – cryptocurrency enthusiasm!
“When cryptocurrency exploded into the public consciousness in 2017, led by meteoric gains in Bitcoin, everyone wanted to talk about blockchain,” writes Francois Aure in CCN today. “The groundbreaking technology that underlies many digital coins was so new that there was almost no way to play it outside of investing directly in cryptocurrency assets.”
Aure finds a disturbing similarity in the explosion of the burger business IPO.
“Beyond Meat is in precisely the same situation, except in the world of vegan meat,” Aure writes. “A rapid increase in valuation often creates an extremely “bubbly” situation. Longer term, bubbles are fantastic for disruptive industries. The attention they bring loads the fledgling technology with an abundance of capital to make the developments they need.”
That said, Beyond Meat remains a bright green spot in red markets as traders are hitting the alarm bells.
In the general market, there is a consensus that the major market-scathing scare results from White House and official remarks about US/China trade talks slated for this week. Stay tuned and watch what happens to index behavior, as well as individual stocks like Beyond Meat that are defying the somber gravity of a melancholy market.