Can Beyond Meat Match the GameStop Meme Stock Craze?

Emerging meme stock Beyond Meat fell from Wednesday’s high in its first test after rocketing more than 1,000%. Investors are trying to turn the stock into a bullish trend similar to the GameStop mania of 2021, but for some, the daily decline has begun to call the movement into question.

BYND hit a local high of $7.69 on Wednesday as traders on social media helped pump the stock up more than 1,435% in six days. However, according to TradingViewit fell 53.45% from that high to $3.58 by Wednesday’s close.

Since then, it has continued its decline, falling to a recent price of $2.91, which represents a roughly 19% drop for the day. That’s still a monstrous gain of nearly 500% over the past week, but it’s a potential sign that momentum is slowing.

Even so during The GameStop phenomenon in early 2021, meme stocks had their own stumbles before making their most explosive gains. After soaring 737% from $4.75 to $39.80 in two weeks in January 2021, GME fell 50% to $19.20 in a single day. In the next three days, it is estimated to have risen by another 529% to $120 TradingView.

“In my opinion, what happened yesterday was just mass hysteria,” said Beyond Meat influencer Dimitri Semenikhin, better known as Capybara stockhe said Unscramble.

GameStop had Keith “Roaring Kitty” Gilland now Beyond Meat investors are looking to Semenikhin for his projections — and he remains bullish on BYND despite the volatility.

“If it was a complete collapse and something was fundamentally wrong, this stock would be trading at $1.50, which it was on Tuesday,” Semenikhin said. “The fact that it’s stabilizing is a good thing for Beyond Meat and investors there in general.”

“The main question as to whether or not it’s going to go up in the short term is the guidance they’re going to post during earnings,” he added, referring to the upcoming Nov. 5 report.

Beyond Meat is a plant-based food company used by many large fast food chains such as McDonald’s, KFC and Pizza Hut. Michael Lebowitz, portfolio manager at RIA Advisors, said Unscramble the company faced financial problems, which led to poor stock performance.

“Beyond Meat was basically on the brink of bankruptcy. The company did a debt swap, so it relieved some of their debt. But in exchange, they diluted their equity a lot,” Lebowitz said, noting that the move sent the stock price down to just $0.50.

“[At] $0.50, it is probably a ‘dead man walking’ company and product sales are declining. They’ve never made a profit since they went public…it didn’t look good.”

He added that BYND had incredibly high levels of short interest – by many traders mark it as the “most shorted” stock on the market. This is what attracted fans of the stock meme, who have a notorious aversion to short sellers depressing a stock’s price.

Short sellers borrow stock, sell it, and then buy it back at a lower price before returning the stock to the lender. Their goal is to bet that the price of the asset will fall so that they can make a profit.

Lebowitz explained that meme stock traders want to “take advantage” of these short sellers. By pumping up the stock price, it forces those with short positions to buy back the stock to avoid catastrophic losses, driving the price up even further. This kind of “short squeeze” was also a major catalyst for GameStop’s price jump in 2021.

“It has to do with a kind of rebel movement – the underdog story that people usually look at short sellers as those rich, old, fat billionaires who sit around and look down on them. And then it’s finally their time to win the fight against them,” Semenikhin explained. “I think now with Robinhood, probably a lot of open shorts are actually retail.”

“But I also think everybody saw what happened with GameStop,” he added. “Every one of those people has seen the movie, everybody knows about it and those historical achievements, and everybody is trying to chase them down.”

However, portfolio manager Lebowitz ultimately believes it’s all just a fad and Beyond Meat will eventually go back to where it came from.

“I think it’s just a meme stock scam. I’m not an expert on Beyond Meat, but it’s most likely going to go back to $0.50 to $1 somewhere down there relatively soon,” Lebowitz said. Unscramble.

By “fraud,” Lebowitz explained, he means that BYND’s price is inflated due to social media hype, which he says is misleading compared to fundamentals.

“They’re promoting something that has no value behind it,” he finished.