US stocks staged another short squeeze.
Overnight in the US stock market, " artificial meat" Shares of Beyond Meat, the first company to go public in the US stock market, surged dramatically, rising over 162% at one point during the day and nearly 600% in three trading days. In after-hours trading, the stock price jumped another 24%. This surge followed news that Beyond Meat announced a partnership with Walmart. An agreement has been reached to expand distribution to more stores across the United States.
Analysts point out that Beyond Meat's soaring stock price has forced investors who had previously heavily shorted the company to liquidate their positions. According to FactSet data, over 63% of Beyond Meat's outstanding shares have been shorted.
It's worth noting that Beyond Meat is facing significant challenges, with its stock price previously falling to as low as $0.50. Industry insiders have warned that, given the company's financial metrics, the market's frenzied speculation may pose substantial risks and could signal the resurgence of a bubble in the US stock market.
Surges by over 162%
On October 21, Eastern Time, Beyond Meat's stock price surged again after the US stock market opened, rising by more than 162% at one point during the day, and closing up 146.26%. The previous trading day, the company's stock price closed up 127%.
In terms of news, Beyond Meat announced on Tuesday plans to increase the supply of some products in more than 2,000 Walmart stores across the United States.
The company stated that Walmart will be one of the first national retailers to offer the new Beyond Burger 6 pack, which features the company's latest recipe burger in an economy pack format. The expanded distribution will include three key products: the Beyond Burger 6 pack, Beyond chicken nuggets, and Korean BBQ-flavored Beyond steak.
On Monday, Roundhill Investments announced the inclusion of Beyond Meat in its thematic ETF, the Roundhill Meme Stock ETF (MEME), which triggered a surge in Beyond Meat's stock price that day.
It's worth noting, however, that the meme stock ETF was shut down due to a lack of investor interest, but was only reopened earlier this month due to an influx of retail funds.
Beyond Meat's soaring stock price has attracted considerable attention and discussion from investors. As one of the leading players in the plant-based protein sector, Beyond Meat's recent performance highlights the challenges and opportunities it faces in an ever-changing consumer market.
Some analysts point out that the inclusion of this ETF triggered a short squeeze, forcing investors who had previously heavily shorted Beyond Meat stock to liquidate their positions. According to FactSet data, over 63% of Beyond Meat's outstanding shares had been shorted.
Analysts say Beyond Meat demonstrates what happens when low nominal share price, retail enthusiasm, active options trading, and relatively high short interest collide: this is what a meme stock rally looks like.
On social media platforms, numerous investors are actively discussing Beyond Meat's strategic changes and how the popularization of plant-based products will affect future growth.
A well-known industry commentator noted in a post: "Is Beyond Meat turning things around? Analysts seem optimistic about improved profit margins and the impact of short interest rates!"
Therefore, Beyond Meat's stock price surge is reminiscent of its heyday as a meme stock chased by retail investors—when they coordinated their actions on online forums, rushing to buy the stock based on sentiment rather than company fundamentals. In 2021, Bank of America... Beyond Meat was once referred to as "one of the hottest stocks on Reddit".
Some analysts have warned that Beyond Meat's "resurrection" may also indicate the resurgence of a bubble in the US stock market—despite high valuations, investors continue to flock to these highly speculative stocks, which could be one of the signs that the market is about to peak.
Despite the surge in Beyond Meat's stock price, the company still faces significant challenges in its operations. Recent results show an earnings per share of -$2.14, and its financial ratios also indicate that its profitability is under pressure.
Just last week, Beyond Meat's stock price plummeted by more than 67% in a single week after announcing the completion of a debt settlement.
In fact, Beyond Meat's stock price has recorded negative returns for five consecutive years. After its IPO in 2019, its stock price once soared to over $230 per share, but then declined all the way down, falling to a low of $0.50 per share, at one point becoming a "penny stock".
The Dow Jones Industrial Average hit a new record high.
On October 21, Eastern Time, the three major U.S. stock indexes closed mixed. The Dow Jones Industrial Average hit a record high during the session. At the close, the Dow Jones Industrial Average was up 0.47%, the S&P 500 was flat, and the Nasdaq Composite was down 0.16%.
Among them, Coca-Cola , a Dow component stock, was boosted by better-than-expected earnings. Shares of 3M and GM surged, closing up 4.1% and 7.7% respectively, supporting the Dow Jones Industrial Average's rise. Additionally, General Motors , the American auto giant... The stock surged 14.9% after the company raised its full-year earnings guidance and exceeded market expectations.
Analysts point out that a solid start to the third-quarter earnings season boosted investor sentiment, pushing US stocks close to record highs again.
According to FactSet data, as of last Friday, 86% of companies had exceeded earnings expectations. This week, approximately one-fifth of the S&P 500 companies will release their earnings reports.
Louis Navellier, founder and chief investment officer of Navellier & Associates, said: "The generally better-than-expected results reported by large multinational companies are a good sign. This means that the third-quarter earnings season has gotten off to a good start, and we can expect a strong year-end rally."
Major U.S. tech stocks were mixed, with Amazon among the top performers. Apple shares surged over 2% , Microsoft Meta closed slightly higher; Google fell more than 2%, Broadcom... Tesla Nvidia shares fell more than 1%. It fell by 0.81%.
Precious metals The sharp drop in prices dragged down US gold stocks, which generally fell sharply. As of the close, gold... Harmony Gold plunges over 11% Gold prices plummeted by over 10%, falling as much as 5.7% intraday, marking its biggest single-day drop since 2013, and briefly dipping below $4,100 per ounce. Silver prices also fell sharply, dropping as much as 8.7% intraday, its biggest decline since 2021.
Most popular Chinese concept stocks closed lower, Nasdaq The China Golden Dragon Index fell 0.97%, Alibaba NIO plunges nearly 4% Automotive stocks fell more than 3%, JD.com Baidu Li Auto Vipshop Beike fell more than 2%. Full Truck Alliance Pony.ai Miniso iQiyi Pinduoduo fell by more than 1%. NetEase Down 0.65%; Bilibili Tencent Music surged over 5% Futu Holdings It closed slightly higher.
Further Reading
(Source: Securities Times) (Times.com)
