Short Squeeze Alert: Beyond Meat Stock Up 24% In 5 Days - FINRA Sale Volume Provides Evidence

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Beyond Meat Inc's (NASDAQ: BYND) stock has been treading south for most of the year.

The stock is down over 30% year-to-date. Yet, over the past five days, the stock has gained more than 24%. Investors in the stock should consider this sudden surge as a dead cat bounce and no more.

So, what fueled the rally in BYND stock momentarily?

  • A weaker-than-expected earnings report prompted Beyond Meat to announce a 19% cut in its non-production workforce.
  • Beyond Meat stock's short interest is at 47.2%. Dec. 4 saw an extraordinary volume of short shares traded for BYND.
  • 2,489,374 was the FINRA short sale volume traded on Dec. 4 - which sent the FINRA Short Volume (FINRA Short Volume / FINRA Total Volume) ratio to 56.58.
  • Nov. 30 had also witnessed high short volume trade at 986,297.
  • Nov. 29 recorded 960,914.
The recent surge in short volume trades and the consequent bump in the stock indicates a probable short-squeeze being responsible for it.

Fundamentally, not much has changed with the company. Beyond Meat's cash burn rate is high and increasing, and revenue is on the decline. The company has $1.14 billion in convertible notes maturing in 2027, and is exploring strategies to manage this financial commitment with its current resources.

Bottom Line: The recent price bump is just a dead cat bounce. At least two analysts downgraded the stock after its Q3 report, drastically lowering their price target on the stock to the $5-$7 range.

BYND Price Action: Beyond Meat's stock was trading at $8.42 at the time of publication on Tuesday.