Beyond Meat: From Cigar Butt to Crowd Delusion

Seven days ago, I wrote about Beyond Meat as a classic cigar butt a broken company priced for bankruptcy, worth a final puff before it went cold.
I opened a position at an average cost of $0.72/share, treating it purely as mispriced optionality, not a franchise.

A week later, that optionality became insanity.

Beyond Meat exploded to as high as $7.69/share, and I sold at an average of $5.69/share a 690% gain in seven days.
I sold 99% of my position.

Not because the company did anything praise-worthy.
Not because the story improved.
But because the market lost its mind.

To put it in perspective: a 690% gain in one week translates to an annualized return of over 100,000%.
That’s not investing. That’s financial hallucination.

This piece isn’t about celebrating a win.
It’s about calling out the madness that turned a rational trade into a speculative circus, where reason was abandoned, and valuation no longer mattered.

What Changed? Nothing.

Absolutely nothing fundamental changed at Beyond Meat:

No new restructuring milestones.
No operating profit.
No evidence of demand recovery.
No reduction in dilution.
No credible path to free cash flow.

The only thing that changed was sentiment from neglect to euphoria.

A heavily shorted, distressed asset suddenly became a social-media toy.
Retail armies descended, meme traders ran wild, and ETFs blindly piled in.

In less than a week, Beyond Meat went from a restructuring footnote to a meme-stock spectacle detached from balance sheets, income statements, or reality itself.

How the Market Forgot the Numbers

At $5.69/share, Beyond Meat now carries a market capitalization of $1.423 billion. That’s a jump from an implied ~$180 million market cap at our $0.72 entry price.

Normalized owner’s earnings: $20 million

At $0.72 → 9× owner’s earnings
At $5.69 → ~71× owner’s earnings

Price has detached from any reasonable fundamentals. The same company, same balance sheet, same problems now trades at seven times the valuation it should, purely on speculation.

The Business Still Bleeds

Let’s recall what Beyond Meat actually is:

Negative equity: liabilities exceed assets by hundreds of millions.
High cost structure: manufacturing remains expensive; efficiency improvements elusive.
Declining volumes: repeat purchase rates flat, even with discounts.
Brand fatigue: celebrity and climate marketing no longer moves the needle.
Balance sheet stress: debt-for-equity swaps preserved liquidity, not solvency.

At this price, the market treats it as if the company has achieved EBIT profitability, brand rejuvenation, and operational efficiency all illusions.

A Cigar Butt No More

A cigar butt works when pessimism is overdone, when price underestimates reality.
It fails the moment optimism hijacks the stock.

When I bought, Beyond was the neglected stub Graham described a company tossed aside with a puff of residual value.

At $5–7/share, it’s no longer neglected. It’s hysteria.
It’s in meme baskets, Reddit threads, retail portfolios chasing short squeezes.
It’s traded, not analyzed.

Cigar-butts rely on indifference. This is mania.

Why I Sold 99%

Selling wasn’t a market call it was discipline.

At $5.69/share, Beyond Meat’s valuation no longer reflects reality.
From an implied 9× owner’s earnings at $0.72, it surged to roughly 71× in just seven days.
The same company, same balance sheet, same problems — suddenly priced as if it had solved every operational and financial hurdle.

Price isn’t based on fundamentals anymore.
It’s driven by flows, momentum, and collective delusion.

Holding size through that kind of insanity isn’t contrarian it’s reckless.
I sold 99%, keeping 1% only as a marker, a way to watch without letting the market dictate decisions.

At this level, any “upside” is retail emotion, not operational reality.
I’m not interested in owning a meme.

The New Reality

Even with generous assumptions:

Component	Assumption	Implied Value
Tangible floor (cash + inventory + PP&E)	$0.90–$1.00/share	✔ Already priced in
Brand & IP optionality	+$0.20–$0.40/share	✔ Already priced in
Market sentiment premium	+$0.10–$0.30/share	❌ Now 5× higher
Total justified value	$1.20–$1.70/share	✅ Fair range
Current market price	$7.45	$5.69/share

Beyond now trades 3–5× above my fair-value range, even under generous assumptions.
It’s no longer cheap optionality — it’s expensive fantasy.

Final Thoughts: From Opportunity to Absurdity

This week reminded me why valuation discipline matters more than outcomes.
Yes, I made money. But it came from market chaos, not just superior foresight.

Beyond Meat hasn’t turned around.
It hasn’t restructured successfully.
It hasn’t rebuilt its brand.
It simply got lucky and so did I. We were dragged along by headline-chasers, meme traders, and ETFs following momentum.

A week ago, it was a study in pessimism a true cigar butt.
Today, it’s a meme balloon untethered from gravity.

And as every cigar-butt investor knows: once the puff turns to smoke, it’s time to walk away.