Shares of Beyond Meat Inc (NASDAQ: BYND) are trading sharply lower Monday morning after the company announced a major debt restructuring plan aimed at strengthening its balance sheet.
The plant-based meat producer has launched an exchange offer to eliminate over $800 million of debt by swapping its 0% Convertible Senior Notes due in 2027 for new securities.
What To Know: The exchange offer invites holders to exchange existing notes for a combination of new 7.00% Convertible Senior Secured Second Lien PIK Toggle Notes due 2030 and up to 326.2 million shares of common stock. CEO Ethan Brown stated the move is intended to “significantly reduce leverage and extend maturity,” supporting the company’s long-term goals.
Beyond Meat has already gained support from holders of approximately 47% of the existing notes. However, the exchange offer is contingent on a minimum participation of 85% of the aggregate principal amount.
Beyond Meat shares appear to be under pressure due to shareholder dilution. The exchange offer includes issuing up to 326.2 million new shares of common stock, which drastically reduces the ownership stake and value of each existing share.
Furthermore, the new notes carry a high 7.00% interest rate (or 9.50% if paid-in-kind), replacing 0% notes. Investors may view these terms as signs of financial distress, seeing the deal as a necessary but painful move.
BYND Price Action: Beyond Meat shares were down 44.14% at $1.59 at the time of publication Monday, according to Benzinga Pro.
How To Buy BYND Stock
By now you're likely curious about how to participate in the market for Beyond Meat – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
Image: Courtesy of Beyond Meat
