I’ve long been a small business junkie. I spent much of my journalism career writing about innovative small businesses that grow quickly by building important products, often in technology. I especially love to see brilliant entrepreneurs guide small quirky companies like Amazon, Netflix, and Priceline into public companies that explode in price and make huge amounts of money for shareholders.
Last week, one of these quirky companies that went public was something called Beyond Meat, a plant-based meat substitute with the symbol BYND. It was supposed to open on Thursday at $25 a share. Before the day was over, it had soared 163%, to $65.75, to become the biggest one-day IPO gainer of the year. (By the end of Friday, it was up further, to over $66 a share.)
Beyond Meat is intentionally targeting big producers like Tyson Foods with its new offering, rather than positioning its product as a vegan offering, according to Forbes: “BYND has made a point to market its products as meat rather than as a vegetarian alternative. Its products are sold in the meat section of grocery stores, and it has long resisted the labelling of its products as ‘veggie burgers’.
“This strategy of marketing their products towards meat eaters appears to be working so far. The company claims in its S-1 that 93% of customers that bought a Beyond Burger at Kroger in the first half of 2018 also purchased animal meat products during that timeframe.”
I know many people here hate the idea of artificial-any-food, but I take a different view. So long as it’s made from healthy and natural products—in this case, a variety of plant items—I say go for it, if there’s a market for it. From all I can tell, Beyond Meat is much healthier than any of the meats put out by the Big Ag companies with their antibiotic-laden products from their polluting CAFOs.
I also love to see these young exploding companies eat the lunches, as it were, of the big corporations. The Forbes article said that Tyson Foods is planning to eventually sell some kind of meat substitute to compete with Beyond Meat. How much do you want to bet Beyond Meat makes mince meat out of Tyson? It’s a situation not unlike what’s happened in the dairy marketplace as plant-based “milks” (soy, almond, coconut) have taken huge marketshare from big boys like Dean Foods, whose stock is way down.
In any event, it’s possible for any of us to make out in this marketplace. Lots of money has been made from the most successful IPOs of the last decade, like Facebook, Netflix, and Google, and it’s made in significant measure by individual investors who make smart choices about which of the IPOs to bet on.
In the food arena, there’s another one of these companies on the IPO horizon—Impossible Foods, which will be supplying Burger King with plant-based burgers later this year. That will allow this junk-food franchise to offers a burger that is actually kind of healthy.
As for BYND, which is actually out there, I’d be hesitant about throwing money at it right away. One of the crazy things about IPOs is that they can start out strong, and then crash and burn in the intervening weeks and months and years. Remember Fitbit, the digital watch maker? Started out over $45 a share in 2016 and is now around $6 a share. Same with GoPro, a maker of video cameras for swimmers, which made it up over $80 a share back in 2015, and is now around $6 a share. If you look at the analysis in the Forbes article I linked to, the valuation associated with BYND may be a little rich, given the underlying company and market realities.
These IPOs are part of capitalism’s way of dealing with problems like small conventional dairies that are being decimated by low prices and Big Ag monopolies that bribe politicians and continue turning out poison substituting for food. It’s not pretty, even cruel in certain respects, but it’s how a free market deals with products that have outlived their usefulness, and ushers in improvements.
Investing in IPOs not for the faint of heart. But it’s neat if you can make out financially, and be involved in a company that’s actually doing some good for society.