Beyond Meat Inc. (NASDAQ:BYND) slid 8% in premarket trading on Friday after the plant-based meat producer released the initial conversion terms for its 7.00% Convertible Senior Secured Second Lien PIK Toggle Notes due 2030.
The company set the conversion rate at 572.7784 shares per $1,000 of principal, implying a conversion price of roughly $1.75 per share. The update follows Beyond Meat’s recent issuance of more than 317.8 million shares tied to its exchange offer for the 0% Convertible Senior Notes maturing in 2027, which closed October 28.
Based on the new terms, as many as 120 million additional shares could be created when the 2030 notes convert at the base rate—pending stockholder approval. Shareholders will vote on the matter at a special meeting on November 19. The prospect of significant future dilution appears to be dragging the stock lower.
Until that approval is secured, the company is only allowed to meet conversion obligations using cash. If approved, Beyond Meat will be able to settle conversions fully or partially in common stock.
The filing also included a make-whole table for the 2030 notes outlining how many extra shares could be added to the conversion rate if a Make-Whole Fundamental Change occurs, depending on hypothetical stock prices and effective dates.
Beyond Meat continues to overhaul its capital structure as the broader plant-based meat sector faces headwinds, with demand cooling after several years of rapid early growth.