Beyond Meat, Inc. (BYND) shares plunged 6.66% in pre-market trading on Tuesday, extending the previous day's losses. The significant drop comes in the wake of the company's recently announced debt-swap deal, which has sparked concerns among investors about substantial share dilution.

The plant-based meat substitute producer disclosed 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 around $800 million and provide 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.

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. As the company struggles to revitalize its business, investors appear increasingly wary of its future prospects, reflected in the continuing stock price decline. The pre-market plunge suggests that the market is reacting strongly to the potential dilution of existing shareholders' stakes.