Beyond Meat shareholders are taking legal action against the alt-protein business, claiming it “failed to disclose material adverse facts”.
Represented by Holzer & Holzer, the shareholders’ main gripe appears to revolve around a $77.4m impairment charge that Nasdaq-listed Beyond Meat eventually revealed in November.
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The loss-making company had issued a warning in October of a pending “material” impairment charge and then later in the month delayed its third-quarter results presentation as the group continued to assess and “quantify” the size of the impairment.
Between those two announcements, Beyond Meat’s shares extended losses for 2025 from around 42% to 63%, despite a brief short-covering rally. Earlier in October, the stock price had entered penny stock territory below $1.00.
While the shares were hammered throughout last year by a series of adverse internal events, including an exit from China and a maturity-extending debt swap, Holzer & Holzer specified a timeframe where shareholders were supposedly hurt.
“If you purchased Beyond Meat shares between February 27, 2025, and November 11, 2025, and experienced a significant loss on that investment, you are encouraged to discuss your legal rights” with the law firm, the litigation representative said in a statement yesterday (26 January).
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By GlobalDataThe statement added: “The lawsuit alleges that defendants issued false and misleading statements and/or failed to disclose material adverse facts regarding Beyond Meat’s business, operations, and prospects.”
It detailed those facts: “The book value of certain of Beyond Meat’s long-lived assets exceeded their fair value, making it highly likely that the company would be required to record a material, non-cash impairment charge.”
And: “The foregoing was likely to impair Beyond Meat’s ability to timely file its periodic filings with the SEC [The US Securities and Exchange Commission].”
Beyond Meat had not responded to Just Food’s request for comment on the legal action and claims at the time of writing.
On the timeline, Beyond Meat disclosed the $77.4m impairment on 10 November, noting the charges were related to some “long-lived assets”.
Other cited factors included the “suspension and substantial cessation” of Beyond Meat’s operations in China – revealed in February – “certain non-routine SG&A expenses”, and “incremental arbitration-related legal expenses”.
The initial impairment warning had come on 24 October in a filing with the SEC.
“The company’s recoverability test, conducted in accordance with ASC 360, preliminarily indicated that the carrying amount of certain of its long-lived assets was not recoverable from the projected undiscounted future cash flows of the relevant asset group,” Beyond Meat explained at the time.
Then early in November – before the final impairment assessment – the third-quarter results were delayed, followed later in the month by Beyond Meat revealing plans to turnaround the business through “strategic initiatives” and an endeavour to boost gross profit margins.
What the Holzer & Holzer statement did not discuss is that Beyond Meat has not turned a profit since it went public on the Nasdaq exchange in 2019. Nor the fact its sales and volumes have been in steady decline across the company’s key markets in the US and Europe amid a general loss in appetite for plant-based meats.
Ahead of the final results for 2025 scheduled for 25 February, Beyond Meat took the unusual step of entering the protein drinks category earlier this month. The shares have started off the new year in the red – down 7.7% so far at $0.88. They have lost 78% in the past 12 months.
