Current "biggest meme stock in the US": The former "leader in plant-based meat" Beyond Meat, soared 450% in a single week, doubled overnight and then returned to its original level.
```
The former star artificial meat company Beyond Meat is experiencing a wild speculative frenzy. This troubled plant-based meat maker's stock price soared as much as 112% during intraday trading on Wednesday, but then gave up all its gains, ultimately closing down 1.1% at $3.58, making it the most volatile trading target in the U.S. market.
On Wednesday (October 22), the company’s stock price once surged by 112%, but fully retraced during the session, finally closing down 1.1% at $3.58, though the weekly cumulative gain still exceeded 450%. According to FactSet data, over 2 billion shares of Beyond Meat were traded on Wednesday, making it the second-most traded stock in the U.S. market, with options trading volume also hitting a record high.
The surge was triggered by the company's announcement on Tuesday that Walmart would expand its distribution in over 2,000 stores, including a newly launched six-piece “value pack.” A week earlier, Beyond Meat had just announced a debt swap deal that led to significant shareholder dilution. Its stock price once fell below $1, hitting an all-time low of $0.52 on October 17.
Despite the price surge, Wall Street analysts remain skeptical about the company’s prospects. The stock currently has 6 sell ratings, 5 hold ratings, and no buy ratings. Miller Tabak + Co. chief market strategist Matt Maley said: “This absolutely shows that the level of speculation and bubbles in the market remains extremely high.”
Retail Craze Returns: WallStreetBets Becomes the Main Battleground
Beyond Meat has become the latest case of the meme stock resurgence. According to media reports, Roundhill Investments included Beyond Meat in its meme stock ETF as of this Monday. The fund specifically tracks high-momentum, highly volatile stocks favored by retail investors.
On Wednesday, the online investing forum WallStreetBets was filled with posts betting on Beyond Meat. “I will hold and buy more tomorrow! Already have 30,000 shares. Let’s go!” one user wrote, with posts filled with exclamation marks.
According to Cboe Global Markets data, a record 1.9 million call option contracts changed hands on Tuesday. Among the most actively traded Beyond options recently, some are betting that the share price will jump to $9, even $40.
Some social media users are discussing initiating a “short squeeze” action against Beyond Meat similar to GameStop in 2021. As of the end of September, about 64% of the tradable shares were shorted. One user wrote on the Reddit forum StocksToBuyToday:
“This is not about becoming a millionaire investor or betting your savings. It’s about something more important: the power of the people. Hedge funds and big institutions bet against us—not because they know the future, but because they think you don’t care.”
According to Business Insider, a trader named Demitri Semenikhin has been recommending the stock on social media, possibly further boosting the stock's momentum on Monday.
Walmart’s Expanded Distribution Fails to Restore Confidence?
On Tuesday, Beyond Meat announced Walmart will expand sales of its products in more than 2,000 stores, including a newly launched six-piece "value pack." This news provided new momentum for Tuesday’s rally.
Danni Hewson, head of financial analysis at AJ Bell, said:
“If sales follow through, a distribution increase deal is of course a good thing, but looking at consumer sentiment toward meat alternatives, it’s clear Beyond Meat faces huge challenges. The current trading frenzy seems more related to a short squeeze than a real change in investor interest in this stock.”
This once-popular brand got a boost during the pandemic, when more people gave up meat and turned to healthier alternatives. But the trend didn’t last, and the brand has struggled since, as consumers have become increasingly concerned about over-processing, high costs, and taste issues.
Ethan Brown told analysts on the company’s August earnings call that the company hopes to counter misinformation about its products and lower prices. “There will be these cultural moments,” Brown said on the call, “and we just happen to be on the other side of this particular moment.”
Hewson said:
“Beyond Meat may still turn things around, but such a turnaround has to be based on high-quality products that can recapture original interest, by seizing current dietary trends and providing the kind of value today’s consumers need.”
From Star IPO to Deep Trouble
Beyond Meat was once a darling of investors.
At its IPO in 2019, the company’s stock doubled on its first day of trading, making it the biggest first-day gainer among companies raising over $200 million since the height of the dot-com bubble. Enthusiasm for meat alternatives and partnership deals with restaurants and supermarket chains once pushed Beyond’s valuation above $10 billion.
But as sales growth slowed and the company continued to post losses, investors lost confidence in the stock. In 2022, Beyond’s share price plunged more than 80% for the full year. For most of the past year, the stock has traded in the $2 to $4 range.
Currently, the company faces severe operational challenges. Annual sales have declined for three consecutive years. Under inflationary pressure, Beyond’s high prices have deterred some consumers, while interest in protein has drawn them back to the meat section of supermarkets.
According to media reports last year, the company, to improve liquidity, had approached bondholders about a balance sheet restructuring plan.
Last week, Beyond announced the preliminary results of a debt swap agreement involving the issuance of millions of new shares, causing its stock price to plunge 49% on October 13. Company founder and CEO Ethan Brown has resigned from the board of directors.
Risk Warning and DisclaimerThe market involves risk, and investments should be made with caution. This article does not constitute personal investment advice and has not taken into account individual users’ specific investment objectives, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Investing accordingly is at your own risk. ```