Beyond Meat has experienced an incredible increase in its stock price, shooting up close to 1,000% in just four days. This unexpected surge has both retail investors and market experts scratching their heads. In doing so, it has ignited #wolfstreetproblems and caused meme stock rally comparisons galore to other infamous rallies. On Wednesday afternoon, Beyond Meat’s shares spiked to a little more than $4. This is an incredible redemption story for the firm, whose inventory had almost disappeared entirely since its 2017 IPO.
The company, which at one point rocketed beyond a $20 billion valuation after its IPO, has had a tough go of things these past couple of years. Sluggish sales have haunted the company for years. With no quarterly profit in more than five years, folks are rightfully starting to wonder about its long-term viability. Consumers are abandoning Beyond Meat’s products in droves. Recently, this last expansion turned the company into a byword for opportunity leading to insolvency.
A new wave of enthusiasm seems to have brought Beyond Meat’s stocks back from the dead. A post by an anonymous Reddit user triggered the stock buyout rush. This momentum combined with a well-timed recovery shooting many more individual investors to jump back into the stock.
While the stock’s short-term euphoria over more sustainable prospects is understandable, analysts warn that technical problems have yet to be addressed on the ground.
“You’re really trading on emotions and technicals, versus fundamentals,” – Mark Hackett, chief market strategist at Nationwide.
Beyond Meat’s all-time high share price was more than $230 in 2019, a stark contrast to its current trading levels. The company has had a hard time keeping its market share, as shoppers buy less of the meat substitutes. Beyond Meat has recently made aggressive moves in an effort to reclaim its dominance in the retail space. They recently inked a new day-and-date distribution agreement with Walmart, further broadening their distribution reach. As many experts have pointed out, this deal “doesn’t really solve all the problems” that are plaguing the company.
While the stock’s dramatic rise reflects a resurgence in interest, the appetite for Beyond Meat’s plant-based burgers remains uncertain. Investors are then left to try to figure out a path through a sometimes emotional trading environment that can easily eclipse performance on the fundamentals.
“This company was essentially being thought of as going out of business not that long ago.”
While the stock’s dramatic rise reflects a resurgence in interest, the appetite for Beyond Meat’s plant-based burgers remains uncertain. Investors are left to navigate a landscape where emotional trading can overshadow fundamental performance metrics.