Beyond Meat’s Share Price Surges on First Day of Trading – The New York Times

The share price of Beyond Meat surged 163 percent on Thursday in the company’s first day of trading on Wall Street, signaling surprising interest in a new generation of companies that are creating plant-based alternatives to meat.

Beyond Meat, which makes vegetarian burgers and sausages, began trading at $25 a share on the Nasdaq stock exchange and ended the day at $65.75.

The stock’s first-day pop is one of the biggest in recent I.P.O. history. In the last decade, only two other companies — both of them biotech start-ups — had bigger increases on their first days of trading on major American stock markets, according to data from the University of Florida professor Jay Ritter.

Beyond Meat is the first plant-based, meat-alternative company to go public, but it is part of a growing industry of start-ups looking to replace animal agriculture. And recent weeks have provided several indications that the business is gaining traction.

Beyond Meat’s biggest competitor, Impossible Foods, teamed up with Burger King to roll out a meatless version of the Whopper sandwich last month. Burger King announced this week that it would offer the sandwich at all of its restaurants in the United States, after a trial in the company’s St. Louis restaurants exceeded expectations.

A day after Burger King’s announcement, McDonald’s chief executive, Steve Easterbrook, told analysts that his company was “paying close attention” to the trend and considering whether it will develop a meatless alternative to its hamburgers.

In the lead-up to the Beyond Meat I.P.O., the poultry company Tyson Foods said it sold its early stake in Beyond Meat, in part because the food conglomerate is developing its own plant-based protein.

Like many high-tech companies that are debuting on Wall Street this year, Beyond Meat is losing money — $30 million last year. But revenue grew faster than losses, increasing 170 percent to $88 million.

And like its competitors, Beyond Meat pitched investors on the idea that its plant-based burgers and sausages can appeal to traditional meat eaters and break out of the niche market that vegetarian alternatives have traditionally occupied.

The start-up, based in the Los Angeles area, has tried to mimic the texture and taste of meat with ingredients like pea protein and beet juice. But it has also argued for the environmental and health benefits of moving away from meat.

“I see it as a movement,” Beyond Meat’s chief executive, Ethan Brown, said in an interview on Thursday. “We’re tapping into something within consumers — within the human race — that is important.”

Beyond Meat’s products are now available in 15,000 supermarkets and several fast-food chains.

Leading up to the I.P.O., Beyond Meat steadily increased the number of shares it planned to sell, and the price where it projected the shares to begin trading.

The company ended up raising around $240 million in the public offering, which is more than it had raised in private markets. When it last raised money from investors last fall, the company was valued at $1.35 billion, according to Pitchbook.

Beyond Meat finished Thursday worth $3.8 billion. The holdings of Beyond Meat’s founder, Mr. Brown, are now worth more than $200 million.

The debut surge has a tinge of disappointment for Beyond Meat because it suggests that the company could have raised much more money from investors.

During an initial public offering, companies take home only what they sell at the initial offering price — $25 in the case of Beyond Meat. So all the gains made after that went to investors, rather than the company.

“Maybe we could have brought more money in, but it is gratifying to see the response of the market,” Mr. Brown said.