Short Squeeze Looms as Beyond Meat Shares Skyrocket

investing.com:

Quiver Quantitative — Beyond Meat stock (NASDAQ:BYND) experienced a dramatic surge, jumping as much as 61% in intraday trading, marking its best one-day move since 2019. This leap has placed significant pressure on short sellers, who are now grappling with nearly $74 million in paper losses. The rally in Beyond Meat's shares is not just a reflection of its quarterly earnings report but also sets the stage for a potential short squeeze. Such a scenario occurs when short sellers, those betting against the stock, are compelled to buy back shares to cover their losing positions, further driving up the stock price.

The plant-based protein company's stock is now heavily shorted, with about 38% of its shares outstanding being used in short positions. The scarcity of shares available to short, coupled with a high borrow fee of 310%, is exacerbating the situation for those betting against the stock. According to Ihor Dusaniwsky, managing director of predictive analytics at S3, this could lead to short sellers being squeezed out due to high stock borrow costs and significant recent losses.

Market Overview: -Beyond Meat surges, squeezing short sellers: Shares jump over 60% after earnings report, inflicting losses and potential squeeze on bearish bets. -High borrow fees and crowded short position: Short sellers face additional pressure due to limited borrowing availability and high costs. -Analyst sentiment remains bearish: Despite the rally, analysts maintain negative outlooks, citing concerns about the company's future.

Key Points: -Earnings surprise triggers significant price rise: Beyond Meat share price spikes on positive outlook and guidance towards profitability. -Short sellers face mounting losses: Significant intraday gains