The champagne corks will be popping like a 21-gun salute for investors in Beyond Meat’s early May Nasdaq IPO, with the shares they had bought for $25 closing at an eye-watering $138 on Friday.
The short sellers have started to raise the speculative eyebrow, with one tweeting that the hype has become "beyond stupid". But the story has captivated retail investors, who appear to be driving demand for the stock.
The Californian company makes the point that meat is just a combination of protein, fat, trace minerals and water, which it reckons it can replicate without going down the wasteful route of involving a flatulent quadruped.
Its boffins concocted a mixture of pea protein, canola oil, water and additives, and the end result has received excellent reviews from carnivores and vegans alike. The company is producing burgers, sausages and mince, and while an invitation to a vegan braai may take a while to get the thumbs-up in traditional farming communities, it’s going down a storm in California. Perhaps the most compelling story is the environmental impact.
One of its burgers uses 99% less water, 93% less land and 46% less energy and produces 90% fewer greenhouse gas emissions than a traditional beef burger. It says that 51% of greenhouse gas is a product of livestock rearing and processing, which suggests that sticking Beyond Meat on the Weber might make more of a difference than buying a Tesla.
If Neil Woodford had spent a little more time reading classical Greek tragedies and a little less time reading balance sheets he might have spotted that whenever hubris appeared, his old chum nemesis was doing his vocal exercises off-stage and preparing for the big entrance.
Woodford’s big moment was when he left Invesco Perpetual, his home for 26 years of successful stock-picking that established his name as one of the City’s superstars, and struck out to set up shop with his name above the door.
Its Equity Income Fund had a strong first year and the loot rolled in, with assets under management peaking at over £15bn, including £3.5bn from St James’s Place and a following among retail punters.
However, performance fell off a cliff in the back end of 2017, prompting a tide of redemption requests which has gone out, revealing Woodford to be without the requisite resources.
In order to meet all the redemptions, Woodford was forced to sell off the liquid parts of his portfolio, which is now uncomfortably dominated by illiquid small caps and unlisted investments. To avoid a breach of the 10% maximum the fund could hold in unlisteds, Woodford sold a portfolio into an investment trust that he also happened to manage, while listing a bunch of others in that well-known and heavily regulated market Guernsey. Money continued to fly out of the door until Woodford was forced to lock in the remaining, unhappy investors.
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