Beyond Meat's sophomore slump

Tuesday, July 30, 2019 by Snacks
"_You sold all your Beyond Meat stock, Ted?_"

"You sold all your Beyond Meat stock, Ted?"

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Munch

1. Beyond Meat plummets 14% after a good/bad earnings combo

Plant-based bae... It's Beyond Meat. And while the biggest new stock of 2019 was up 794% from its IPO price on Monday, shares dropped 14% after its 2nd ever earnings report was released after-hours. It made a lot bigger loss than investors expected. But Beyond was focused on the positives on its plate:

  • Sales: They nearly quadrupled to $67M.
  • Partnerships: Breakfast sammies with Dunkin', burgers with Tim Hortons, tacos with Del Taco, and meal kits with Blue Apron.
  • Pipeline: Pea-based bacon and steak are in the works.
  • Projections: It upped its sales forecasts for this year because grill season is happening.

1 problem... Beyond's giving away more Beyond. Shares plummeted as soon as execs announced they would issue more shares of the company. Like an Initial Public Offering, Beyond is raising new $$$ for the biz by selling new shares — it's just not "initial" anymore. This "secondary" offering dilutes the value of existing shareholders' stock, and they're not thrilled CEO Ethan Brown and other big shareholders are selling stock in this offering too.

THE TAKEAWAY

Nice problem to have... Beyond is strategically issuing new shares while its stock price is high — short-term, it hurts the price, but Beyond thinks it'll create long-term value. It'll spend the new money on new factories so it can access the 98% of plant-based meat-eaters who also buy meat — "The Reducetarians."

Steal

2. Capital One announces 106M credit card applications got hacked

New HR training... The FBI is prosecuting a former Amazon employee for stealing data from Amazon's servers (she's under arrest). The data belonged to Capital One, which announced the bad news Monday, sending shares down 3%. It's a win for the FBI — we don't often see hackers get ID'd (much less arrested). Now they just need to find the getaway USB stick.

What's in your wallet?... The hacker knows. Capital One is the #5 provider of credit cards in the US, offering up bank accounts too to people and businesses — so the victims are widespread.

  • Who's affected: Anyone/anything that applied for credit cards between 2005 and 2019.
  • How they're affected: Mailing address, DOB, email, phone numbers, and self-reported income are all out there. For a smaller number (~140K) they got SSNs, too. The bank said no passwords or credit card numbers were taken.
  • What to do if you're affected: Capital One believes "it is unlikely that the information was used for fraud or disseminated". More info here.
THE TAKEAWAY

Is this a cloud story? An Amazon story?... In Seattle, they're charging the alleged hacker for breaking into the physical servers humming along with Capital One's data (we're picturing Mission:Impossible vibes). It's not reassuring that a disgruntled employee at the top cloud company can steal customer files. That's because virtually all big companies rent server space from Amazon, Google, Microsoft, or other cloud providers.

Purge

3. Pfizer's new merger created a new company: Viagra + EpiPens

Welcome to the Senior PGA Tour... Pfizer has decided to get rid of its seasoned drugs that used to be hugely profitable, but have gone off-patent and aren't cut out for the big leagues anymore. We're talking its drugs whose patents have expired. And Pfizer's merging those oldies with fellow drugmaker Mylan, which specializes in has-been generic and off-patent drugs:

  • From Team Pfizer: Xanax (anxiety), Viagra (erectile dysfunction), and Lipitor (cholesterol)
  • From Team Mylan: EpiPens (allergies)
  • Team Name — TBD: The not-yet-named mixed will be a separate, publicly-traded company with $20B in annual sales, combining all the above.

Patent protection = profit protection... Drugmakers thrive off patents — That protection from competition lets them develop a unique medicine and pretty much name their price. Once the patent expires, the competition arrives.

  • Viagra used to bring in $1.4B in sales annually for Pfizer. In 2017 competition came with Hims, Roman, and Teva Pharmaceutical's brazenly-named "Generic Version Viagra".
  • Mylan has lost profits and stock price after the generic version of EpiPen (also by Teva) was approved last year.
THE TAKEAWAY

This is cheap drugs vs. expensive drugs... Pfizer's spinning off its classics so it can focus on more "lucrative" drugs that are patent-protected (it just bought an expensive cancer-treating one for $11B last month). But now Pfizer's losing its ol' faithful revenue generators. The pressure is on their scientists now to pass those clinical trials and unleash new blockbuster drugs.

What else we’re Snackin’

  • Out: Lyft's COO is quitting just 4 months after the IPO
  • (Also) Out: Uber is letting go of 400 employees in its marketing department worldwide
  • Shimmy: ByteDance, the Chinese social media legend, is making its own physical phone
  • Mash: Just Eat and Takeaway (aka the food delivery icons of Europe) just merged to fend off Uber Eats and Deliveroo
  • Meta: The London Stock Exchange is itself publicly traded — and its own shares jumped 9% as it tries to acquire data provider Rifinitiv

Tuesday

Disclosure: Authors of this Snacks own shares of Beyond Meat and Amazon.

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