Beyond Meat, Inc. (BYND) shares plunged 17.86% in intraday trading on Tuesday, continuing a sharp downward trend that began earlier in the week. The significant drop is primarily attributed to the company's recently announced debt-swap deal, which has ignited serious concerns among investors about substantial share dilution.

The plant-based meat substitute producer revealed that approximately 97% of its convertible note holders agreed to the terms of a debt exchange offer. While this deal will reduce Beyond Meat's debt load by roughly $800 million and provide the company with more time to strengthen its balance sheet, it comes at a considerable cost to equity investors. The exchange will result in the issuance of up to 326 million new shares of common stock, dramatically increasing the current outstanding share count of about 76.1 million, effectively diluting existing shareholders' stakes by more than 400%.

This latest development compounds Beyond Meat's ongoing challenges, including declining annual sales for the past three years and the absence of profitability since its inception. TD Cowen analysts have maintained their Sell rating on the stock, slashing their price target to 80 cents from $2, citing that "the company remains financially and operationally challenged." As Beyond Meat struggles to revitalize its business amid intensifying competition and changing consumer preferences, investors appear increasingly wary of the company's future prospects, reflected in the continuing stock price decline that has seen shares fall below $1 for the first time since its IPO.