Beyond Meat, Inc. (BYND) shares surged 10.08% in after-hours trading on Tuesday, marking a significant turnaround after the stock had plummeted below $1 during regular trading hours. This unexpected rally comes on the heels of the company's announcement of a major debt restructuring plan aimed at reducing its debt load by over $800 million.

The plant-based meat alternative company revealed that it had reached an agreement with a majority of its creditors to swap convertible notes due in 2027 for new ones maturing in 2030. As part of this restructuring, Beyond Meat plans to issue up to 326 million new shares of common stock. While this move is intended to improve the company's financial position, it has raised concerns about significant shareholder dilution, given that the company had just under 77 million shares outstanding prior to this announcement.

Despite the positive after-hours movement, Beyond Meat continues to face significant challenges. The company has been struggling with declining demand for its products, reporting a 19.6% year-over-year decrease in net revenue in its second-quarter results. Analysts remain cautious, with TD Cowen lowering its price target on the stock to 80 cents from $2 while maintaining a Sell rating. As Beyond Meat attempts to navigate these headwinds, investors will be closely watching to see if this debt restructuring can provide the financial flexibility needed for a potential turnaround in the competitive plant-based meat market.