UPDATE 3-Beyond Meat shares crumble on stock offering surprise, demand for meatless burgers soars

Beyond Meat Inc saw shares sink on Monday on plans for another stock offering just three months after its IPO while demand for its plant-based burgers and sausages soared in the second quarter and prompted an increase in its full-year sales forecast. Trading was volatile and shares fell more than 12% after hours on news of a 3.25 million share offering that includes 3 million shares from selling stockholders.

Proceeds are earmarked to raise funds to expand its manufacturing facilities that are being stretched by booming demand for its meat alternatives. Executives on a call with analysts declined to comment on the offering. Beyond Meat's shares have surged over 780% since the IPO in May as the company's meat alternatives entered the menus of restaurants such as Carl's Jr and on shelves of grocers including Kroger Co.

"For another growth stock, the top-line beat and raises would be enough to see a post-market rally, but there are a lot of Beyond Meat investors out there looking for any excuse to sell a stock that has rocketed so much since its IPO," said Kamal Khan, analyst at financial markets platform Investing.com. At supermarket chain Morton Williams, which owns 16 locations across New York City, some customers are buying Beyond Meat burger patties and sausages by the case, according to Victor Colello, the chain's director of meat and fish.

"Beyond Meat is really flying off the shelves. My business with it has almost doubled and we're sold out at times," Colello said. The latest version of the burgers is made from peas, brown rice and mung beans. Net revenue rose nearly four-fold to $67.3 million in the three months ended June 29, above Wall Street's estimate of $52.71 million, according to Refinitiv IBES data.

The company said it expects net revenue to rise over 170% to $240 million in 2019, up from the prior $210 million it had forecast just last month. The El Segundo, California-based company reported a net loss of $9.4 million, or a loss 24 cents per share, compared with a loss of $7.4 million, or a loss of $1.22 per share in the year-ago period.

Looking ahead, Chief Executive Officer Ethan Brown said in a statement that the company would continue to invest in marketing, expansion of distribution channels and new products. Even so, the company has skeptics. Some 46% of the company's publicly traded shares are shorted, according to research group S3. Those investors, owning shares worth $1.1 billion, are betting on the company to miss its targets and the share price to drop.