By Siddharth Cavale and Uday Sampath Kumar
(Reuters) – A cooling of the U.S. stock market’s taste for plant-based meat makers has raised doubts among some investors and analysts about Impossible Foods’ plans to achieve a $10 billion flotation.
Impossible is seeking to go public through an initial public offering or via a merger with a blank-check company within the next 12 months, sources told Reuters this month.
The market value of larger competitor Beyond Meat, however, has sunk from a peak of $14 billion to closer to $8.5 billion and is predicted by several brokerages to fall further.
Both firms carry expectations of being big players in a so-called faux meat market which some predict could be worth $85 billion a year by 2030 as dietary habits shift.
But with retail sales of some products sliding, four sectoral investors told Reuters that Beyond’s 420% rise in value since listing in September 2019 was now seen as overcooked.
“It’s pretty shocking when you see some of these valuations come out,” said Patrick Morris, whose Eat Beyond vehicle has invested in three Canada-listed plant-based ventures.
“The $10 billion for Impossible Foods, with Beyond Meat at $8 or $8.5 billion? The first reaction is that these valuations are coming from outer space,” added Morris, who said he is looking at investing in Impossible if it opens its books.
Some existing investors have told Impossible that it should aim to go public at a valuation below where Beyond is trading, a person familiar with the discussions told Reuters.
Impossible declined to comment.
While the signs remain positive for plant-based food, COVID-19 has halted restaurant sales, and sector studies suggest that the industry has yet to convincingly win over shoppers.
Nevertheless, both Beyond and Impossible have signed deals with major restaurant and grocery chains and the U.S. industry as a whole grew by 44% last year during the pandemic.
Revenues at Beyond and some other producers are growing, but the rate of volume sales growth of fresh and fully cooked plant-based meat alternatives has been declining steadily at U.S. retail stores since July last year, NielsenIQ data shows.
Unit sales growth eased from 32.6% in the July to September period last year to 1% in January to March quarter of 2021, when compared to the same period a year ago, the data showed.
Beyond’s sales overall were still just $407 million last year, and its stock trades at nearly 21 times sales per share, according to Refinitiv data, versus 1.6 times and 1.9 times for Kellogg Co and Kraft Heinz, which last year had sales of $13.78 billion and $26.19 billion respectively.
“Food companies need to trade in a multiple that has some logic to it,” said Christopher Kerr, Chief Investment Officer at Unovis Asset Management, an early investor in Beyond Meat who cashed out and now holds stakes in Oatly and Zero Egg.
“The question is can they get to something that represents market valuation tied to revenues … right now we’re seeing some pretty premium valuations out there,” Kerr added.
Graphic: Beyond Meat market cap – https://fingfx.thomsonreuters.com/gfx/buzz/jznpnandjvl/Beyond%20market%20cap.PNG
One reason for the valuation floated for Impossible is the boom in special-purpose acquisition deals and initial offerings that has seen big jumps for a range of start-ups at launch.
Brian Schaeffer, managing director of private equity trading platform InvestX, which allows investors to trade in pre-IPO companies, said Impossible had been one of the top five traded stocks on the platform since introducing it this year.
“The SPAC trend is super aggressive right now …so those kind of public valuations are being translated into interest on the private platforms,” Schaeffer added.
Some market debuts, however, have not gone as well.
British-based food delivery service Deliveroo flopped on its debut last month.
While Impossible does not publish sales numbers, some industry estimates give it a less than 4% share of the U.S. imitation meat industry, compared with Beyond Meat’s 25%.
Beyond has signed deals with McDonald’s, PepsiCo and KFC and Taco Bell owner Yum Brands while Impossible last year gave up on McDonald’s, citing its inability to supply on the required scale.
Impossible’s burgers and sausages are available at only 20,000 stores globally, versus Beyond’s 122,000 and it is still seeking regulatory approval in Europe and mainland China, where the genetically modified yeast it uses is banned.
“There is so much money (from SPACs) looking for so few places to go, because the space is so new,” Curt Albright, managing member of alternative protein investment firm Clear Current Capital said.
“Whether the valuations are too much or too little, that the market will figure out eventually.”
(Reporting by Siddharth Cavale and Uday Sampath Kumar in Bengaluru; Editing by Patrick Graham and Alexander Smith)
Ontario reports 653 new COVID-19 cases on Sunday – CBC.ca
Ontario reported another 653 cases of COVID-19 on Sunday. The majority of the new cases, 499, have occurred in individuals who have either not been fully vaccinated or whose vaccination status is unclear.
Here are some other key pandemic indicators and figures from the Ministry of Health’s daily provincial update:
Tests completed: 31,063
Provincewide test positivity rate: two per cent
Active cases: 5,591
Patients in ICU with COVID-related illnesses: 177; 127 needed a ventilator to breathe
Deaths: Six, pushing the official toll to 9,704
Vaccinations: 21,651,850 doses have been administered to date. Nearly 86 per cent of Ontarians aged 12 or older have now received a first dose, while slightly more than 80 per cent have received two doses.
The 2 Michaels are home. But what about the 115 Canadians still detained in China? – Global News
Heartwarming images and video surfaced of the two reuniting with their families. Prime Minister Justin Trudeau on Friday called their homecoming “good news for all of us,” noting that they had both gone through an “unbelievably difficult ordeal.”
But as of Sunday at least 115 Canadians remain in custody in Chinese prisons, Global Affairs Canada said in an emailed statement to Global News. Not all Canadians imprisoned in China are in arbitrary detainment, but the agency said at least four of those jailed are on death row.
“Canada opposes the death penalty in all cases, everywhere,” Global Affairs Canada said.
“We have raised our firm opposition to the death penalty with China and continue to call on China to grant clemency for all Canadians sentenced to death.”
“Two Michaels” and Meng Wanzhou return home
The agency said it reviews each detention on a case-by-case basis, as consular officials often require a “tailored approach” that can adapt to different local contexts and circumstances.
Here’s a look at the four Canadians currently on death row.
Michael Kovrig, Michael Spavor arrive in Canada after almost 3 years in Chinese prison
Of those sentenced to death, the most recent is Canadian Robert Schellenberg of Abbotsford, British Columbia. The Liaoning High Court upheld his death sentence on Aug. 10 following an appeal made over the summer.
Schellenberg was detained on drug charges in China in 2014 and was formally charged with drug smuggling in January 2015. Initially, a Chinese court had sentenced him to 15 years in prison. But four years later, his verdict was overturned following a retrial and he was sentenced to death.
Canadian Foreign Affairs Minister Marc Garneau said in August that Canada “strongly” condemned the court’s decision to uphold the death penalty for Schellenberg.
“We have repeatedly expressed to China our firm opposition to this cruel and inhumane punishment and will continue to engage with Chinese officials at the highest levels to grant clemency to Mr. Schellenberg,” he said, shortly after the ruling was delivered.
“We oppose the death penalty in all cases, and condemn the arbitrary nature of Mr. Schellenberg’s sentence.”
In an emailed statement to Global News, Global Affairs Canada reiterated that the federal government remains “strongly opposed” to the decision to arbitrarily impose and uphold the death penalty for Schellenberg.
The agency added it “will continue to engage with Chinese officials at the highest levels to seek clemency for Mr. Schellenberg.”
Chinese court upholds death sentence against B.C. man
Canadian Xu Weihong was sentenced to death by the Guangzhou Municipal Intermediate Court over drug manufacturing charges on Aug. 6, 2020. They also handed down a life sentence to Wen Guanxiong, whom they claim helped Xu make ketamine.
Chinese foreign ministry spokesperson Wang Wenbin justified Xu’s death sentence during a briefing last year, saying that death penalties would help “deter and prevent” similar crimes in the future.
“I would like to stress that China’s judicial authorities handle the relevant case independently in strict accordance with Chinese law and legal procedures,” Wang had said.
He added that “this case should not inflict any impact on China-Canada relations.”
China defends death sentence for Canadian convicted of making illegal drugs
Ye Jianhui is the fourth Canadian to receive the death penalty in China.
His sentence was handed down in August of last year over charges to manufacture and transport drugs by the Foshan Municipal Intermediate Court, just one day after Xu’s.
Ye and co-defendant Lu Hanchang conspired with others to manufacture and transport drugs between May 2015 and January 2016, the Associated Press reported last year.
Asked last year if the sentencing of the Canadian drug offenders was linked to Meng’s case, Wang said China’s judicial organs “handle cases independently,” while also adding that “the Canadian side knows the root cause” of difficulties in China-Canadian relations.
Fan Wei was given the death penalty on April 30, 2019 along with 11 others over his involvement in an international methamphetamine operation.
Speaking to Global News the day of his sentencing, Global Affairs Canada said officials attended the sentencing and reading of the verdict. They called on China to grant clemency, adding the decision to apply the “cruel and inhumane” death penalty to Fan’s case was of “extreme concern” to their government.
“Obtaining clemency for Xu Weihong, Ye Jianhui and Fan Wei is also of primary importance given China’s decision to impose the death penalty in these cases,” Global Affairs Canada said, in an emailed statement to Global News on Sunday.
“Canada will continue to provide consular services to Robert Schellenberg, Xu Weihong, Ye Jianhui and Fan Wei, as well as to their families.”
— With files from Global News’ Saba Aziz and Aaron D’Andrea, as well as the Canadian Press, Associated Press and Reuters.
© 2021 Global News, a division of Corus Entertainment Inc.
Michael Kovrig and Michael Spavor have finally landed in Canada – CTV News
Two Canadians who’ve been imprisoned in China for more than 1,000 days have arrived safely in Canada.
Michael Spavor and Michael Kovrig, detained on espionage charges since Dec. 10, 2018, arrived at the Calgary International Airport early Saturday morning, following an overnight fuel stop in Alaska.
Footage from CTV News on the tarmac shows several passengers greeted by Prime Minister Justin Trudeau with a hug, though everyone in the footage is wearing a mask.
A spokesperson for the Prime Minister’s Office told CTV News’ Bill Fortier at the airport that the passengers are indeed the two Michaels. The spokesperson added that it is very emotional moment for both of them and they would not be taking questions.
Later in the day, a smiling Kovrig landed at Toronto’s Pearson International Airport, where he was met by his sister and wife. Kovrig briefly spoke to media, where he issued his thanks for the support and said he would have more to say in due time.
“It’s wonderfully fantastic to be back home in Canada,” he told reporters. “I’m so grateful for everybody who worked so hard to bring both of us back home.”
Trudeau announced the two would be returning to Canada in a late-night press conference on Friday, only once the two had left Chinese airspace.
“Welcome home, Michael Kovrig and Michael Spavor,” Trudeau wrote in a tweet on Saturday. “You’ve shown incredible strength, resilience, and perseverance. Know that Canadians across the country will continue to be here for you, just as they have been.”
News of their release has garnered celebration from across Canada, including from Conservative Leader Erin O’Toole and NDP Leader Jagmeet Singh, as well as from people who knew the two Canadians.
“It’s hard to describe but I’m just so thrilled for him and his family more than anybody else,” Praveen Madhiraju, a colleague of Kovrig’s, told CTV News Channel on Saturday. “This has been a long time coming and we’re just thrilled for this next chapter.”
Deputy Prime Minister Chrystia Freeland said the two Michaels showed “incredible strength” during their detention.
“Michael Kovrig and Michael Spavor are now home — they, as well as their families, have shown incredible strength, bravery and resilience,” she tweeted on Saturday. “The Canadian government has worked hard to secure their release. We thank everyone involved who helped make it possible.”
The Michaels arrived in Canada just one day after a British Columbia court dropped the extradition case against Huawei executive Meng Wanzhou over fraud and conspiracy charges related to American sanctions against Iran.
Meng had earlier Friday pleaded not guilty to all charges in a virtual appearance in New York court, where the judge signed off on a deferred prosecution agreement.
The two Michaels were both convicted of spying in closed Chinese courts earlier this year. Spavor was sentenced to 11 years in Chinese prison, while Kovrig had yet to be sentenced.
The detainment of the two Canadians has largely been seen as retaliation for Meng’s arrest, though China has repeatedly denied any connection between the Michaels and Meng.
Colin Robertson, a former Canadian diplomat, told CTV News Channel on Saturday that the swift release of the two Michaels shows that their detainment was in fact retaliatory.
“Obviously this is the acknowledgment that this was really a retaliatory hostage taking for Meng Wanzhou,”
“I think (this is) a triumph for quiet diplomacy, because this was kept very much to wraps. Nobody knew what was going on. I was as surprised as the rest of Canada.”
With files from The Canadian Press
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