Shares of plant-based meat producer Beyond Meat (BYND -1.80%) plummeted in early trading Thursday, for the seemingly craziest of reasons: News that McDonald's (MCD -1.56%) Canadian unit canceled its trial run of a "P.L.T." sandwich using Beyond Meat meatless patties ... nearly two months ago!
Old news or no, Beyond Meat stock tumbled 10% in early trading and remains down about 4.7% as of 12:15 p.m. EDT. Let's dig into the story and find out what happened.
Here's the deal: This morning, Canada's CBC news site reported "McDonald's ends Beyond Meat burger trial in Canada with no set plans for a plant-based option."
Well and good. That's a story. That sounds like a good reason for Beyond Meat stock to be down today. But get this:
CBC goes on to explain, though, that McDonald's actually ran its trial "between Sept. 30 last year and April 6" this year, wrapping up the trial more than two full months ago. However, as the news site explains, "McDonald's made no public announcements when the P.L.T. trial ended in April," simply removing information about the burger from its website "with no explanation."
So this was still a surprise, right? Well, maybe not. There's an argument to be made that this information should already have figured into the stock's valuation and therefore Beyond Meat stock should not be going down today. Turns out, McDonald's Canada responded to a consumer inquiry on April 28 on its Twitter account, confirming that it ceased selling the P.L.T. and has "no current plans to" bring back the Beyond Meat offering "at this time."
Hi there. Our Plant-Based Burger was being tested in several Markets until April 6th. We have no current plans to bring it back to our menu at this time. However, we will be sure to share your feedback with our team for future consideration.— McDonald's Canada (@McDonaldsCanada) April 28, 2020
Granted, this wasn't a formal announcement. But just a week later, an analyst from J.P. Morgan referenced the trial run's cancellation during Beyond Meat's earnings conference call and again confirmed that the trial run had ended.
Still, the news seems to have taken some investors by surprise -- and this is why the stock is falling today.