Key Points
Beyond Meat stock has fallen below the $1-per-share level needed to continue trading on the Nasdaq stock exchange.
The company's financial struggles make it likely that management will soon move to carry out a reverse stock split.
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Beyond Meat (NASDAQ: BYND) has been an exciting stock to follow over the last year. In the span of a week, the company's share price briefly skyrocketed more than 1,000% as the stock achieved meme stock status, investors bet on a continued short squeeze, and those who had bet against the stock moved to close out their shorts by buying shares.
Subsequent trading has mostly been a different story. As of this writing, the company's share price is down 84% from its 52-week high. The stock has also fallen 16.5% across 2026's trading. Beyond Meat shares currently sit at under $0.70 per share -- significantly below the $1 per share level needed to continue trading on the Nasdaq stock exchange.
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So could a reverse stock split be in Beyond Meat's future? Let's see.
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A reverse stock split allows a company to combine multiple shares of its stock to create a new share -- like multiple pieces of a pie being combined to create a larger piece. With fewer overall shares, the value of each share is increased. A reverse stock split doesn't change a company's fundamentals or overall value, but it does allow for an easy way to increase its share price.
Beyond Meat stock looks poised for a structural change
Due to sales and margin pressures facing the business and news that the company has delayed its annual filings in order to conduct new inventory reviews, Beyond Meat stock is trading below the $1-per-share level and could could continue to do so for the foreseeable future.
In the absence of good news for the company's fundamentals or a resurgence of bullish meme-stock momentum, Beyond Meat stock is at significant risk of remaining below the necessary Nasdaq listing level. If the Beyond Meat were to be delisted from the Nasdaq, the company's share price could face new selling pressures. The company could also see its fundraising avenues narrow significantly.
Beyond Meat 's core meat-substitute products haven't been driving sales growth, and its low gross margins have meant that profits have remained elusive. Now, the compoany is aiming to reinvigorate performance by introducing new lines of protein shakes and diversifying its product lineup to take advantage of potential growth drivers , but the business is in rough shape. The company is posting substantial losses, and its revenue has been on a downward trend.
While Beyond Meat has been able to cut back on operating expenses, weak gross margins and deteriorating sales mean that management can't rely on reducing operating expenses to engineer a path to profitability. The likelihood that the business will continue posting substantial operating losses means that Beyond Meat will need to continue raising money to fund its operations. This means it will either have to take on debt or sell new stock. If the company wants to sell new stock in order to raise capital, continuing to trade on the Nasdaq exchange is probably crucial.
On the other hand, this doesn't completely guarantee that the company will carry out a reverse stock split to continue trading on the Nasdaq. There are a handful of other scenarios that could potentially play out, including the business being acquired or taken private. Even so, Beyond Meat opting to conduct a reverse stock split appears to be the most likely outcome right now.
Should you buy stock in Beyond Meat right now?
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Beyond Meat. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
