Beyond Meat surges on heavy volume as retail traders position for a squeeze in the embattled plant-based meat company
Shares of Beyond Meat are soaring in early trading on Monday, with retail traders hoping for a turnaround — or more realistically, a powerful short squeeze — as the embattled plant-based meat producer scrambles to raise cash to protect its viability.
As of 7:15 a.m. ET, more money had changed hands trading the faux meat firm in the premarket than the likes of Apple, Microsoft, or Palantir.
The stock cratered to an all-time low of $0.50 last Thursday after management completed a deal with nearly 97% of the holders of more than $1 billion in senior convertible notes due in 2027 (with a coupon of zero) to exchange those for $196 million in second lien notes due in 2030 (with a coupon of 7%) and more than 316 million shares, a massive dilution of existing shareholders that raised the company’s share count by more than 300%. Those noteholders are now far and away the biggest holders of the company’s equity.
A former Reddit user (who since appears to have been banned from the platform) with the handle capybaraSTOCKS appears to be at the genesis of this newfound wave of optimism surrounding the stock. The user has purportedly since moved to YouTube and says they own 4% of the company. They posted a video on Sunday explaining their thesis, including progress on the company reducing its debt load, its brand value, and the potential for a short squeeze.
“High community interest, social media buzz, and most importantly a near 500 million shares traded volume on Friday” suggest “Beyond is now entering meme stock territory,” per the video.
The stock was among the most highly shorted US companies heading into the month, with over half its shares sold short, per Bloomberg data. That number likely came down meaningfully in the short term thanks to the issuance of over 316 million shares as part of the aforementioned debt-for-equity-and-other-debt swap last week, which saw those who took the company up on its plans temporarily barred from transferring beneficial ownership or selling a large portion of the new shares.
