What Happened?
Shares of plant-based protein company Beyond Meat (NASDAQ:BYND) jumped 4% in the morning session after a partial recovery followed a significant sell-off in previous trading sessions.
The stock’s small gain came after a drop of more than 6.5% during the last trading day, which marked its fifth consecutive day of losses. The recent negative pressure on the shares stemmed from several developments. Multiple law firms were scrutinizing Beyond Meat for possible securities law violations after the company announced a substantial non-cash impairment charge. In addition, some financial firms lowered their price targets on the stock, citing challenges like increased U.S. demand for animal meat and tough competition from other plant-based brands, which dampened the company's growth prospects.
After the initial pop the shares cooled down to $1.20, up 4.8% from previous close.
Is now the time to buy Beyond Meat? Access our full analysis report here.
What Is The Market Telling Us
Beyond Meat’s shares are extremely volatile and have had 71 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 3.7% on the news that the stock reversed course following a massive, multi-day rally that appeared to be driven by a short squeeze rather than any positive company news. The stock had surged in previous sessions despite the company facing significant challenges. A short squeeze happened when a heavily shorted stock's price went up, forcing traders who bet against it to buy shares to cover their positions, which in turn pushed the price even higher. This rally occurred even as Beyond Meat reported falling revenue, widening net losses, and negative profit margins. The company's financial health was also a concern, with reports noting shrinking sales and a high cash burn rate. The downward move suggested the buying pressure from the short squeeze was fading.
Beyond Meat is down 69% since the beginning of the year, and at $1.20 per share, it is trading 73.3% below its 52-week high of $4.48 from December 2024. Investors who bought $1,000 worth of Beyond Meat’s shares 5 years ago would now be looking at an investment worth $8.73.
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