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Beyond Meat short interest: Shorting BYND suggests plant-based hype was overdone

By Alejandro Arrieche

Edited by Jekaterina Drozdovica

16:48, 15 November 2022

Beyond Meat's plant-based meat products: burgers, beef, sausage.
The troubled plant-based meat producer Beyond Meat has been on short sellers’ radar in 2022. – Photo: Shutterstock, Sundry Photography

The price of Beyond Meat (BYND) stock has dropped by over 70% year-to-date as of 15 November as the company is facing a slowdown in its retail sales amid worsening macroeconomic conditions in the US.

Currently, the BYND short interest is one of the highest among Nasdaq-listed stocks as short sellers are expecting the worst for the plant-based meat company as funding is becoming scarce for companies with weak fundamentals. 

What is Beyond Meat (BYND)?

Beyond Meat is a manufacturer of plant-based vegan meat substitutes. The company was founded in 2009 and its products are reportedly sold in more than 130,000 retail and food service establishments across the world as of 2021. 

The company’s top products include the Beyond Meat Burger, Sausages and Beef. During the first nine months of 2022, Beyond Meat generated net revenues of $339m and net losses of $299.27m.

Ethan Brown, the founder of the firm, served as the CEO as of November 2022. The firm employed around 800 workers to run its operations across the world after it laid off approximately 200 people as part of its cost-reduction initiatives. 

Beyond Meat listed its stock on the Nasdaq Stock Exchange on 1 May 2019 at $25 a share under the ticker symbol ‘BYND’. 

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Beyond Meat short interest steady as top executives keep departing

According to data from MarketBeat, as of 15 November, the BYND short interest stood at 40.9% by the end of October, meaning that 23.44 million shares were being borrowed by short sellers by then with the expectation that the price would keep declining. 

This figure was lower than the 41.4% Beyond Meat short interest from 15 days before, and the first drop since late August. 

News regarding the departure of several key executives including the firm’s CGO (chief growth officer), Deanna Jurgens, and CFO Philip E. Hardin rattled the markets and contributed to the latest spike in the Beyond Meat short interest. 

In addition, the company’s third-quarter results revealed that its US retail sales flattened, compared to the same period a year ago, while international sales dropped by 26%, fuelling BYND stock short interest further.

The vegan meat producer burned approximately $340m in cash during the first six months of 2022 and is currently sitting on cash reserves of just $390.18m. Meanwhile, its outstanding debt stood at $1.1bn by 1 October 2022. 

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A deterioration in the fundamentals of the business has hit the BYND stock price in 2022, and a spike in Beyond Meat short interest, from 36% at the end of 2021 to 40.9%, as of late October 2022. 

Beyond Meat stock price, 2019 - 2022

Data from MarketBeat indicated that it would take short sellers around 7.3 days to cover their positions without tipping the market, based on the average BYND daily trading volumes. 

The combination of high short interest and days to cover readings exacerbate the odds of a Beyond Meat short squeeze. It could take a major company-specific development for market participants to raise the price of the troubled plant-based meat producer.

Analyst outlook for Beyond Meat’s stock

As per data from MarketBeat of 15 November, the consensus recommendation from analysts for BYND stock stood at ‘hold’, with 9 out of 13 analysts rating the firm as such and four analysts rating it a ’sell’.

The average price target for BYND sat at $20.38 a share. The highest and lowest predictions from analysts for BYND stock stood at $62 and $8. Multiple analysts lowered their price targets for the firm following the release of the company’s latest quarterly earnings report.

Despite this, the average analyst prediction could suggest a BYND short squeeze is possible as it leaves a 24.77% upside from the share price on 15 November.

Final thoughts 

Note that analysts’ predictions about BYND short squeeze can be wrong and have been in the past. As such, they shouldn’t be used as a substitute for your own research. 

Always conduct your own due diligence on the stock, looking at the latest news, a wide range of commentary, fundamental and technical analysis. Remember, past performance does not guarantee future returns. And never trade money you cannot afford to lose. 

FAQs

What is the short interest for Beyond Meat stock?

As per data from MarketBeat, the BYND short interest stood at 40.9%, as of 31 October 2022.

Is BYND a buy or sell?

According to MarketBeat of 15 November, the consensus recommendation from analysts for BYND stock stood at ‘hold’, with 9 out of 13 analysts rating the firm as such and four analysts rating it a ‘sell’. Note, however, that these predictions can be wrong.

Is Beyond Meat a good investment?

Whether Beyond Meat stock is an appropriate investment for you would depend on your investing goals, risk tolerance, timeframe and other personal factors. You should always conduct research on the company to form your own opinion. 

Markets in this article

BYND
Beyond Meat Inc (Extended Hours)
6.14 USD
-0.06 -0.980%

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