It’s been a busy couple of weeks for Beyond Meat, the much-hyped purveyor of fake meat. At the end of September the company announced that it was making an exchange offer to its existing bondholders through the issue of new shares and over $200m (€170m) of 7% convertible bonds.

The share issue involved in the exchange was huge, with around 316 million new shares for the company which had, before the exchange, around 76.5 million shares outstanding.

For existing shareholders this is obviously a massive dilution of value. Unsurprisingly, the stock market reaction was negative with Beyond Meat’s shares dropping on the day the proposed swap was announced and falling further when, on 13 October, the company announced the completion of the exchange.

By 16 October the shares were trading at $0.50 (€0.43) each, an all-time low.

That should have been the end of that, but an announcement by the company that it had secured an expansion of its distribution in Walmart stores in the US attracted the attention of retail investors who rushed to buy the shares in the hope Beyond Meat would become the next meme stock.

(A meme stock is one where a large number of retail investors buy into a company, pushing the value of its shares far beyond the fundamental value of the underlying business.

The purchases are driven by hype on internet forums and videos, with the buyers hoping to get out with a profit before the stock drops again.)

On 22 October, Beyond Meat’s share price hit an intra-day high of $7.69 (€6.59), a 1,500% increase from the closing price seen a week earlier.

However, like many things to do with this company, that rallied has proven to be little more than a passing fad. A week after topping $7, those shares were back below $2 each.

Beyond Meat has struggled for years to live up to the early expectations of investors who poured in money when it listed on the US stock market six years ago, pushing its stock price above $220(€189) in 2019 (see Figure 1).

With US consumers now favouring high-protein animal products and keen to avoid ultra-processed foods, the market for fake meat in America is way, way smaller than the lofty projections seen in 2019.