Monday's Headlines: Beyond Meat Issues Revenue Warning

Monday's Headlines: Beyond Meat Issues Revenue Warning

Here were the biggest movers in the MyWallSt shortlist on Friday:

Moving Up ⬆️

Howard Hughes Corporation (HHC) +4.2%

ShotSpotter (SSTI) +2.0%

Avalara (AVLR) +0.6%

Hain Celestial (HAIN) +0.6%

FedEx (FDX) +0.5%

Moving Down ⬇️

Peloton Interactive (PTON) -16.9%

Duolingo (DUOL) -15.0%

Farfetch (FTCH) -10.4%

Stitch Fix (SFIX) -10.3%

Lemonade (LMND) -9.1%


Meta’s First Metaverse Struggles to Catch Anyone’s Attention 😵‍💫

Just days after Meta (META) announced its pricey Quest Pro VR headset and the addition of legs to avatars, internal documentation shows that the company’s central metaverse product, Horizon Worlds, isn’t anything about which to shout.

In memos acquired by The Wall Street Journal, officials at Meta reported that the aging social media company will miss its initial goal of 500,000 monthly active users for Horizon by the end of 2022. Its revised goal is 280,000 and the platform currently has less than 200,000.

Even worse, most visitors to the Horizon generally don’t return to the app after the first month.

Combined, these factors could spell trouble for the platform’s ability to take flight as Horizon is designed as an interactive space where users can party, shop, and work. Of course, other people are central to interaction, so this flywheel has yet to be perfected.

To this end, Meta has begun herding users into smaller and smaller worlds in the hope they’ll have some fun. As one official stated: “an empty world is a sad world”. It was also reported that Meta has paused the release of all new Horizon features until its current user experience can be improved.

This isn’t the first time Meta has had trouble convincing the public to join The Matrix. Meta’s Quest virtual-reality headset, which is needed to access Horizon, has had declining retention rates for the past three years. More than half of these headsets aren’t in use six months after they are purchased.

In response to these reports, a Meta spokesman said the company’s metaverse efforts were always intended to be a multi-year project. They also reaffirmed the company’s belief that the metaverse is the future of computing. Time will tell if they’re right, maybe the legs will change everything.


Beyond Meat Announces Revenue Warning, Job Cuts, Ditches Nose-Biter 🛑

Shares of Beyond Meat were down big on Friday after the company issued a revenue warning and announced job cuts. The beleaguered plant-based meat pioneer has cut its third-quarter and full-year revenue guidance in the face of waning demand for meat alternatives, increased competition, and inflationary pressures on customer spending.

Management now expects third-quarter revenue of $82 million, falling well below analyst expectations of $113.6 million. It would represent a drop of 23% year-over-year. For the full year, revenue expectations are now between $400 million and $425 million, down from prior guidance of $470 million to $520 million.

To try and salve the blow from this dip in demand, Beyond is resorting to wide-scale job cuts, cutting 19% of its total staff count. The cuts will look to save up to $39 million a year as the company focuses on reducing its cash burn and achieving positive free cash flow.

Lastly, in what is a poetic way to get the boot from an alternative meat company, former COO Douglas Ramsey is leaving the company after an incident in which he allegedly bit a man’s nose in an altercation after a college football game. He was charged with third-degree battery and “terroristic threatening.”

Beyond Meat stock is down 79% year-to-date.


Nutanix Spikes on Takeover Rumors 📈

Shares of Nutanix Inc jumped more than 25% on Friday and remain up in premarket trading this morning after the cloud data-storage firm was reported to be considering a sale.

On Friday, The Wall Street Journal claimed that Nutanix had received takeover interest, which prompted its board to start exploring strategic options, including putting itself up for sale to private equity or industry partners. So far, Nutanix has declined to confirm or deny the reports, stating that it does not comment on "market rumors or speculation".

Founded in 2009, Nutanix is an American cloud computing company that sells software, cloud services (such as desktops-as-a-service, disaster-recovery-as-a-service, and cloud monitoring), and software-defined storage. Specifically, the company is known for its solutions that allow businesses to have the security of a private cloud with the flexibility of a public one, making it easy to bring multi-cloud strategies into one platform.

However, like all software companies, Nutanix stock has been hammered on the markets, with its stock down close to 60% from all-time highs witnessed soon after the company IPO’d in 2018.

With a market cap of roughly $6 billion currently, investors are expecting a big premium to be set on the company in the event of a sale.

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