Beyond Meat’s No. 2 Stock Holder Embraces Offering That Spooked the Market
Beyond Meat’s No. 2 StHolder Embraces Stock Offering That Spooked the Market
(Bloomberg) -- Beyond Meat Inc.’s second-largest shareholder said the recent stock offering is “healthy” with the shares up almost 600% since their debut.
Last week’s deeply discounted offering increased liquidity in the market and allowed early investors to sell small stakes, said James Joaquin, co-founder of Obvious Ventures, in an interview. He doesn’t view venture firms selling shares as a negative signal for the stock.
“It’s a natural cycle,” Joaquin said in a telephone interview.
The alternative meat maker has been on fire since its May initial public offering but shed 22% of its value after the unexpected secondary offering came at a steep discount. Insiders, including CEO Ethan Brown, got a jump on post-IPO trading restrictions and cashed out some of their holdings.
Even after its recent plunge, shares are still trading above the average price target from analysts surveyed by Bloomberg, who are cautions about the stock’s valuation. Beyond Meat rose as much as 3.3% before turning negative on Tuesday.
Across its investment vehicles, Obvious Ventures and its co-founders invested less than $10 million in Beyond Meat, Joaquin said. The firm offered 348,138 shares in the recent sale, which at $160 apiece would translate into $55.7 million in gross proceeds for Obvious Ventures. The firm would still hold a 6.7% stake in Beyond Meat if underwriters exercise their option to buy additional shares in the latest offering, according to a filing.
Joaquin declined to comment on whether the firm will sell more shares when restrictions lift at the end of October, saying that “venture capital firms tend to distribute to their limited partners” who then make the decision of whether to sell or hold the stock.
Overall, Obvious Ventures remains bullish on Beyond Meat’s long-term prospects and is “very pleased” with the stock’s performance and earnings results so far.
To contact the reporter on this story: Tatiana Darie in New York at tdarie1@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Morwenna Coniam
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