What happened
In a bearish atmosphere, stock investors can occasionally be oversensitive about fairly minor developments. That was the dynamic at play Monday with Beyond Meat (BYND -1.87%). The company's shares were driven down by over 11% in early trading on a fairly minor development with a rival.
Some obviously felt that reaction was overblown and later helped drive the stock back into positive territory, as it closed more than 1% higher on the day.
Image source: Getty Images.
So what
Monday morning, Bloomberg reported that Beyond Meat's privately held peer Impossible Foods had terminated a clutch of its employees. While concerning at first glance, the move wasn't exactly a full-scale cull. In an email response to the business news agency, an Impossible Foods spokesperson said that "a small number of employees were impacted" by the company's rationalization measures.
Apparently, less than 15 workers were affected, out of a total workforce of roughly 800. Furthermore, added the spokesperson, "We are continuing to actively hire, with plans to increase the size of our team throughout the year."
Beyond Meat has not yet commented on Impossible Foods' move. Nor is it likely to, as it isn't in the habit of discussing developments with rivals.
Now what
Investors were right to "correct" the market's earlier overreaction. Even if Impossible Foods' latest personnel move was indicative of any underlying issues in the alternative protein segment of the food industry, it's very small scale and not worthy of concern.
Instead, investors should keep a sharper eye on how Beyond Meat keeps developing its own business. While it has done well putting its products on grocery store shelves and on the menus of big restaurant chains, competition continues to ramp up in the fake meat market.
