Why Beyond Meat Sank 12% in October

Core Insights - Beyond Meat experienced significant stock volatility in October, initially declining due to a convertible debt exchange that led to substantial dilution, followed by a brief rally fueled by a distribution deal with Walmart, and ultimately ending the month down 12.4% [1][5][6] Group 1: Stock Performance - On October 17, Beyond Meat announced an early settlement of $1.15 billion in convertible senior notes, resulting in existing shareholders facing approximately 81% dilution of outstanding shares [3] - Following the dilution, the stock surged around 1,600% from its lows due to a meme stock rally, which was further supported by a deal to expand product availability at over 2,000 Walmart stores [4] - The stock's gains were short-lived, as preliminary results revealed a projected third-quarter revenue of around $70 million, with a gross margin of only 10% to 11%, leading to a significant decline in stock price [5][6] Group 2: Financial Outlook - Beyond Meat's third-quarter revenue is expected to be down about 14% year-over-year and down 34% from Q3 2021, indicating challenges in standing out in a competitive plant-based meat market [6] - The company anticipates operating expenses between $41 million and $43 million, resulting in an operating loss of approximately $34 million for the quarter [8] - Beyond Meat announced a delay in its quarterly earnings report due to the need for additional time to address a material non-cash impairment charge related to long-lived assets [8]