The bells! The bells!

By Frank Buhagiar on Monday 14 August 2023

The bells! The bells!
Image source: The bells! The bells!
CommentaryFoodTech Investment

Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers

30 share price fallers, 12 share price risers and six non-movers in FFF’s listed FoodTech space during the week ended 11 August 2023. Ring any bells?  Last week’s Food on the Move reveals all: 30-12-6, the exact same split between fallers, risers and non-movers as the previous week. Only numbers of course. Just a coincidence. Aside from a momentary flicker of interest, nothing meaningful added. One positive to mention though. At least, the deficit between fallers and risers didn’t widen any further. Clutching at straws springs to mind.

Speaking of bells. Bells of the alarm variety ringing in the ears of investors in Beyond Meat (BYND), if a 17.5% share price fall is anything to go by. The trigger? The title of Motley Fool article “The plant-based meat maker reported another round of dismal results”, a neat summary of what lies behind the fall. First up, the article highlights how BYND is not alone: “…the protein industry in general is struggling. Tyson Foods also issued disappointing numbers; showing that Beyond Meat and the rest of the industry are failing to convert people away from animal-based meat…Like much of the rest of the plant-based meat industry, Beyond Meat is faltering, and the latest results put those challenges into sharp relief. Revenue tumbled 30.5% to $102.1 million in the second quarter, which missed estimates of $108.4 million…”

The MF continues: “Gross margin was just 2.2% in Q2, meaning the company had just $2.3 million left over after paying for the cost of production. That was actually an improvement from a year ago…On the bottom line, the company reported a generally accepted accounting principles (GAAP) loss of $53.5 million, or $0.83 per share, which was…better than the consensus estimate of a loss of $0.86.” So not all bad then, although management did cut full-year revenue guidance to $360-380 million. Previously, $375-415 million revenues had been pencilled in. Mixed bag then. CEO Ethan Brown certainly thinks so: "The second quarter brought mixed results amid otherwise strong progress toward our goal of sustainable long-term growth." Mr Market yet to be convinced.

Another FoodTech, another set of Q2 numbers. This time from plant genetics company, Benson Hill (BHIL): revenues up 16.5% to $109 million; gross profits down $2.8 million to $3 million; operating expenses up $8.1 million to $40.4 million. As for full-year guidance: “Consolidated gross profit is now expected to be $20 million to $25 million compared to the prior guidance of $20 million to $30 million…The Company is taking additional actions to reduce operating expenses by $10 million annually in 2024.”

Another mixed bag then. Enough to warrant a 27.5% share price fall over the course of the week? Perhaps interim CEO Deanie Elsner’s mention of a “strategic review” didn’t help: “After nearly two months as interim CEO and more than four years on the Company’s Board of Directors, I continue to be impressed with our competitive advantages in technology, innovation pipeline, and the strength of the talent here. However, in light of the evolving market conditions, the time is right to initiate a broad strategic review to identify the most effective ways to unlock the Company’s full potential behind our technology platform and innovation pipeline.”  BHIL, the latest in a long line of strategic reviews in FFF’s listed FoodTech space. Not all have ended well. Here’s hoping the bells won’t be tolling for BHIL.

Finally, Steakholder Foods’ (STKH) hot streak may have come to an end – shares closed down 16% at $1.17 - but the cultivated meat specialist still had cause to celebrate. Back to that hot streak. As recently as 11 July, the shares were languishing at $0.68 a pop. By the end of July, they had more than doubled to US$1.62. Okay, so the shares have since retraced, but crucially the share price remains above the $1 level. Crucially? Because that was enough for the company to receive “a notification letter from the Listing Qualifications Department…of the Nasdaq Stock Market…, informing the Company that it has regained compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2).”

STKH’s announcement “Steakholder Foods Regains Compliance With Nasdaq Minimum Bid Price Requirement” goes on to explain: “The Company had previously announced on March 27, 2023, that it was notified by Nasdaq that it was not in compliance with the minimum bid price requirement…as the closing bid price of the Company’s American Depositary Shares (‘ADSs’) had been below $1.00 for more than 30 consecutive business days. On August 7, 2023, Nasdaq provided confirmation to the Company that for the last 10 consecutive business days, from July 24, 2023 to August 4, 2023, the closing bid price of the ADSs was $1.00 or greater, that the Company has hence regained compliance…” Question is, were this week’s losses just a one-off. As a few more like that, and the share price graph will soon start to resemble…a bell curve. The bells! The bells!