Beyond Meat’s shareholders are pursuing legal action against the alternative protein company, asserting that the U.S. firm “failed to disclose material adverse facts.”
Represented by Holzer & Holzer, the shareholders’ primary concern appears to be related to a $77.4 million impairment charge that Beyond Meat publicly disclosed in November. This revelation has raised questions about the transparency of the food and beverage industry and its impact on investor trust.
The loss-making company had previously issued a warning in October about an impending “material” impairment charge. It also delayed its third-quarter results presentation to assess and quantify the potential size of the impairment.
Between these two announcements, Beyond Meat’s stock price witnessed a staggering drop, extending its losses for 2025 from approximately 42% to 63%. Earlier in October, the shares slipped into penny stock territory, trading below $1.00.
Despite a series of adverse internal events throughout the previous year, including an exit from China and a debt swap, Holzer & Holzer identified a timeframe during which shareholders allegedly suffered financial losses. “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 lawsuit claims that defendants issued false and misleading statements and/or failed to disclose crucial adverse facts regarding Beyond Meat’s business operations and prospects. One of the central issues highlighted was that the book value of certain long-lived assets exceeded their fair value, making it nearly inevitable that the company would need to record a significant, non-cash impairment charge.
Furthermore, the lawsuit suggested that these issues could hinder Beyond Meat’s ability to meet its filing obligations with the SEC (U.S. Securities and Exchange Commission). Notably, the Rosen Law Firm has filed a similar lawsuit on behalf of Beyond Meat shareholders for the same period.
At the time of writing, Beyond Meat had not responded to Just Food’s request for insight into the ongoing legal matters. Notably, the company disclosed the $77.4 million impairment charge on November 10, attributing it to some “long-lived assets.” Other influencing factors included the “suspension and substantial cessation” of operations in China and various non-routine expenses.
The initial impairment warning was issued on October 24 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 detailed.
As November progressed, the third-quarter results were unexpectedly delayed, and Beyond Meat outlined plans to turn the business around through “strategic initiatives” aimed at boosting gross profit margins.
It’s essential to note that Holzer & Holzer did not address the fact that Beyond Meat has not achieved profitability since its public offering on the Nasdaq in 2019. Additionally, sales and volumes have been declining in key markets both in the U.S. and Europe, amidst a diminishing appetite for plant-based meats.
Ahead of the upcoming 2025 results scheduled for February 25, Beyond Meat recently took the unusual step of entering the protein drinks category. As a result, the shares started the new year on a downward trajectory, down 7.7% thus far, trading at $0.88, and experiencing an overall decline of 78% over the past 12 months.
