Beyond Meat craters in premarket trading on heavy volumes

Beyond Meat’s rally has seemingly gone from well done to overcooked in a hurry.

Shares of the plant-based meat company are cratering, down nearly 20% in premarket trading on heavy volume.

As of 5:05 a.m. ET, the stock has traded more than $60 million in the premarket. That’s the fifth-highest of all stocks listed on US exchanges, trailing only the pure-play quantum computing companies (after a report that the US government may take stakes in these companies) as well as Tesla, which reported earnings after the close on Wednesday.

It’s an about-face for Beyond, which has seen the premarket session be a source of particular strength over the past few days. In fact, the stock’s recent peak of $8.86, which marked a rally of 1,672% from its all-time low in less than four sessions, occurred in the premarket session on Wednesday. It’s down more than 60% since that time.

What’s different about the Beyond Meat move compared to the so-called short squeezes we’ve seen in the past is that the cost of borrowing shares has gone down, not up, during its period of intense gains. However, that’s what we would expect given its shares outstanding jumped from ~76 million to close to 400 million in light of its debt-for-equity swap, which temporarily gave those creditors control over the company.

So, while its previous parabolic move may have been extremely painful for existing shorts, it’s also making it arguably more attractive for any doubters to put on fresh bets that the surge in the stock is half-baked.