Beyond Meat Stock Plummets After Surge Driven by Retail Investors
The stock price of plant-based meat processing company Beyond Meat, which had surged due to buying pressure from retail investors, has turned to a downward trend after just four trading days. Retail investors aimed to increase Beyond Meats stock price to trigger a short-covering phenomenon, where short sellers would be forced to buy back shares, but the learning effect from past meme stock frenzies has led to an increase in short interest instead.
On the 22nd (local time), Beyond Meats stock closed down 1.1% at $3.58 on the Nasdaq. Earlier in the day, the stock price rose to $7.39, but it plummeted as the market approached closing time, ending lower than the previous trading session. In after-hours trading, the stock fell an additional 11.17%.
This marks the first time the stock has closed lower since the 16th, after a week of skyrocketing by 417.49%. Just earlier this month, Beyond Meat’s stock was trading below $1, but news of a supply contract with Walmart and its inclusion in a meme stock ETF attracted significant buying interest.
Investors on the U.S. online community Reddit have been drawn to news related to Beyond Meat and its high short interest. The strategy proposed was that if retail investors bought large amounts of stock, short sellers who faced mounting losses would be compelled to buy back their positions, potentially driving the stock price even higher. This strategy is reminiscent of the GameStop incident during the COVID-19 pandemic.
However, despite the surge in stock price, the large-scale short-covering that U.S. retail investors hoped for has not yet occurred. According to financial data firm S3 Partners, short sellers of Beyond Meat are estimated to have lost over $120 million in the past week. Nevertheless, the short interest remains high, indicating that the situation may still evolve.
In summary, while retail investor enthusiasm briefly drove Beyond Meats stock price to new heights, the anticipated short-covering has not materialized, leaving investors to navigate the uncertain waters of the market.
On the 22nd (local time), Beyond Meats stock closed down 1.1% at $3.58 on the Nasdaq. Earlier in the day, the stock price rose to $7.39, but it plummeted as the market approached closing time, ending lower than the previous trading session. In after-hours trading, the stock fell an additional 11.17%.
This marks the first time the stock has closed lower since the 16th, after a week of skyrocketing by 417.49%. Just earlier this month, Beyond Meat’s stock was trading below $1, but news of a supply contract with Walmart and its inclusion in a meme stock ETF attracted significant buying interest.
Investors on the U.S. online community Reddit have been drawn to news related to Beyond Meat and its high short interest. The strategy proposed was that if retail investors bought large amounts of stock, short sellers who faced mounting losses would be compelled to buy back their positions, potentially driving the stock price even higher. This strategy is reminiscent of the GameStop incident during the COVID-19 pandemic.
However, despite the surge in stock price, the large-scale short-covering that U.S. retail investors hoped for has not yet occurred. According to financial data firm S3 Partners, short sellers of Beyond Meat are estimated to have lost over $120 million in the past week. Nevertheless, the short interest remains high, indicating that the situation may still evolve.
In summary, while retail investor enthusiasm briefly drove Beyond Meats stock price to new heights, the anticipated short-covering has not materialized, leaving investors to navigate the uncertain waters of the market.
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