Former Cisco Chair and CEO John Chambers — aka the godfather of Silicon Valley — has good reason to jump for joy over the wildly positive reception to Beyond Meat’s initial public offering Thursday.
Two years ago the now venture capital investor took a stake in cricket farm operator Aspire Food Group. Aspire uses crickets to whip up a range of protein-packed food products. Beyond Meat’s well-received debut ultimately validates the alternative food movement and boosts the valuations of businesses just like Chambers’ Aspire.
“I am a huge believer in the space. Two years ago I bet on crickets as a major source of protein,” Chambers told Yahoo Finance. Chambers, who now boasts a portfolio of 18 upstart companies as founder of VC firm JC2 Ventures, adding “I am glad Beyond Meat [shares] popped today — they are a disruptor.”
To say the management team at Beyond Meat, a meat-substitute company, will sleep well today may be an understatement.
Beyond Meat shares exploded 162% to $65.60 in their debut on the Nasdaq Composite today. The company ended its first day of trading with a $3.8 billion market cap, according to Yahoo Finance data. Beyond Meat priced its offering at $25 a share on Wednesday.
The enthusiasm for Beyond Meat reflects the shift in eating habits sweeping across the nation. Millennials and teens are waving goodbye to beef and other meats and hello to plant-based alternatives.
Beyond Meat CEO Ethan Brown told Yahoo Finance he won’t be looking at the stock price all day. He added it’s good to see the market reward the company for its innovation.
“We really are focused on our business and on executing against our strategy. I’m going to try to drive the growth and value of the business by focusing on the fundamentals,” Brown said.
Investors do need to remember, however, that Beyond Meat has never been profitable. Beyond Meat lost $29.9 million in 2018 on $87.9 million in sales. To achieve sustainable profits, it will need a range of new products and more distribution channels. And then it has to hope competing brands from a Tyson Foods don’t gain too much traction.
Brian Sozzi is an editor-at-large and co-host of ‘The First Trade’ at Yahoo Finance. Follow Brian Sozzi him on Twitter @BrianSozzi
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