Preface

Beyond Meat, once a penny stock, has dramatically surged after becoming part of a meme ETF. The plant-based meat company saw its stock price jump significantly, echoing its earlier popularity when retail investors favored it based on sentiment.

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Beyond Meat soared 47% within a day. Shares surged over 127% due to its addition to a meme-themed ETF and a new distribution deal with Walmart.

Main Body

In an unexpected turn of events, Beyond Meat has rebounded significantly on the stock market, attributed primarily to its inclusion in the Roundhill Meme Stock ETF. This sudden surge marks a sharp contrast to its recent performance, where the stock had been languishing as a penny stock after losing most of its value following its 2019 IPO.

Tuesday’s sharp increase of 47% followed a record-breaking Monday, where the company's stock soared over 127% upon news of its ETF inclusion. This development was compounded by Beyond Meat’s strategic partnership with Walmart, aimed at expanding the company's retail presence across the United States. With a substantial portion of the company's shares being sold short, the ETF inclusion is believed to have triggered a short squeeze, pushing the stock price higher as short-sellers rushed to cover their positions.

Just last week, the stock had notably dropped by more than 67%, mainly due to the announcement of a finalized debt deal. Currently priced around $2 per share, the stock had plummeted to as low as 65 cents, reflecting intense pressure over the past few years. Since its peak post-IPO price of $230, Beyond Meat has struggled with consistent financial challenges, resulting in losses each year for five consecutive years.

However, this week's rally revisits the days when Beyond Meat was a meme stock sensation among retail traders. Back then, the stock price was more influenced by investor sentiment and coordinated online discussions than solid company fundamentals. In 2021, Beyond Meat was even flagged by Bank of America as a notable Reddit stock to watch, although that year concluded with its stock down 47%.

This resurgence in Beyond Meat's stock price may indicate a broader trend of speculative market behavior. Investors appear to be gravitating towards high-risk stocks trading at high valuations, signaling potential market volatility. Notably, Roundhill initially discontinued its meme ETF due to waning interest but revived it following renewed enthusiasm from retail investors eager to engage in this persistent bull market.

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