Plant-based food producer Beyond Meat makes gold on Wall Street due to pact with Walmart and ‘meme stocks’

The Shares of Beyond Meat, the maker of plant-based burgers and sausages, soar more than 90% on Wall Street and in just four days they rise a 1,100%in a new case of ‘investment madness’ by those known as “meme stocks” or “meme actions”that is, those of companies that go viral among investors after being popularized by amateur traders and that, periodically, have caused unusually large jumps in stocks punished by the market.

The rally began on Friday and it gained strength Mondaywhen the American edition of Business Insider reported that an operator called Demitri Semenikhin, popularly known as Capybara Stocks, had been promoting the action on social media.

The impulse may also have been fueled by bearish traders covering their short positions: around 64% of the shares available for trading had been sold short at the end of September. Roundhill Investments added Beyond Meat to its Roundhill Meme Stock ETFas reported by the firm in a publication in x (formerly Twitter).

“We keep hearing people say that the market is not as overextended as it was during the Internet bubble. That may be true, but that doesn’t mean the market isn’t still very overextended, and this type of behavior shows it,” he added Maley.

The rebound was more Tuesdaywhen the company announced that Walmart will expand the availability of its products to more than 2,000 storesaccording to a statement. “The current wave of activity appears to have more to do with a short squeeze than with a real change in investor appetite for the stock.” A short squeeze is the rapid and sharp rise in the price of a financial asset caused by the need for short sellers to repurchase the asset to cover their losing positions.

He Shares worth about $5.9 billion were traded on Tuesdayequivalent to 4.2 times the company’s market capitalization at closing. The previous Thursday, the company worth less than 40 million dollars.

Beyond Meat Stock collapsed at the beginning of last weekwhen the company announced that almost all of its creditors had agreed to a debt swap which will involve a significant dilution for shareholders. Beyond Meat currently has six sell recommendations, five hold recommendations and no buy recommendations.

The previously very popular stock received a strong boost during the pandemicwhen more consumers opted for reduce meat consumption in favor of healthier alternatives. However, the trend was not maintainedand the brand has struggled ever since as consumers become increasingly put off by the high level of processing, high costs and taste.

“Beyond Meat could still turn things around, but that turnaround must be based on solid products that recover the initial interest, taking advantage of the current food trends and offering the type of value for money that consumers demand today“he added Hewson.