Beyond Meat Stocks: Beyond Meat rises 60% to six-month high amid short-term pressure from price hikes and cost-cutting plans
As of Monday, about 37.6% of the company’s float, or $172.6 million worth of shares, were sold short, according to data and analytics firm Ortex. Bearish investors have lost $93 million on paper since Tuesday’s close.
Beyond Meat was also the second most shorted U.S. stock after COVID-19 vaccine maker Novavax, according to a report this week from S&P Global Market Intelligence.
The company, which supplies McDonald’s and Yum Brands, has lost nearly 70% of its market value since its much-hyped IPO in 2019 as persistent inflation and high prices have taken a toll on sentiment toward plant-based meat.
Beyond Meat reported fourth-quarter net income fell 7.8% to $73.7 million, but that was better than the $66.7 million analysts had expected.
The company also plans to “rapidly cut” operating costs to restore margins damaged by price cuts aimed at making faux meat more attractive to budget-conscious U.S. consumers. Gross margins in 2024 are expected to be in the mid-teens range, compared to negative 24.1% in 2023. “, analyst TD Cowen said in a note.
The stock last traded at $12, which would mark its highest one-day gain if gains hold. However, this compares to a 12-month high of $19.25 in July.
When short sellers rush to get out of their bearish bets due to a surge in the stock price, a phenomenon called a short squeeze occurs, pushing the stock price higher.
“We expect short sellers to add to the buying pressure, creating a short squeeze,” said Peter Hillerberg, co-founder of Ortex.
