Bitcoin bull Michael Novogratz is seeing the same rush of enthusiasm toward Beyond Meat that came at the height of the crypto bubble.
The former Fortress hedge fund manager said while big ideas — like new alternatives to animal meat and money — capture people’s attention, they can also become drastically overbought.
“Beyond Meat reminds me a little bit of crypto in 2017,” Novogratz told CNBC’s “Squawk Box ” on Thursday. “You get great bubbles on big ideas. This is a great bubble.”
The plant-based meat maker has been on a tear since its IPO in May. Last week, shares hit an all-time high of $208.48, a 720% rally since the IPO. But the hot streak snapped this week after the company posted mixed second-quarter earnings.
Shares continued to stumble Thursday, dropping 10%, after the company announced a secondary stock offering at $160 — an 18.6% discount from Wednesday’s closing price. Beyond Meat plans to sell an additional 3.25 million shares with 3 million coming from investors and 250,000 from the company.
As more shares come on the market and the lock up period for employees ends, Novogratz predicts a steep decline in Beyond Meat’s share price.
Much like bitcoin, Beyond Meat is trading at a “ludicrous price, but everyone gets sucked in,” said Novogratz, who is also a former Goldman Sachs macro trader.
“All the young guys on their Robinhood accounts are buying this. This is their crypto,” he said.
Novogratz was an early bitcoin investor and started a cryptocurrency-focused merchant bank Galaxy Digital, which went public on a Canadian stock exchange last year during what many called “crypto winter.” Cryptocurrency became a poster child for retail-driven bubbles after bitcoin rallied to almost $20,000 at the end of 2017, only to come crashing down the following year.
Bitcoin lost more than 70% of its value last year, and ended 2018 around $3,800. It was trading near $10,012 Thursday.
— CNBC’s Jasmine Wu contributed reporting.