One-time penny stock Beyond Meat soars after addition to meme ETF, jumps 47% on Tuesday

Beyond Meat has regained a bit of its meme mojo status, surging 47% on Tuesday.

The food company, renowned for its plant-based meat alternatives, is experiencing an extraordinary week, with shares skyrocketing over 127% on Monday—its best day ever—after Roundhill Investments added the stock to its Roundhill Meme Stock ETF (MEME).

This rally continued into Tuesday, following Beyond Meat’s announcement of a deal with Walmart to expand distribution across more U.S. stores.

The addition to the ETF seems to have triggered a short squeeze, forcing investors who had bet against the stock to cover their positions. According to FactSet, over 63% of the shares available for trading were sold short.

This remarkable turnaround comes after the stock plummeted over 67% just last week, following the company’s announcement of a finalized debt deal. Currently, the stock is trading around $2 per share, a significant increase from last week’s closing price of just 65 cents.

Historically, Beyond Meat has faced challenges, posting losses for five consecutive years. After reaching a peak of over $230 per share post-IPO in 2019, it has since struggled, becoming a penny stock.

This week’s rally is reminiscent of Beyond Meat’s previous meme stock status, where retail traders flocked to the stock based on sentiment rather than corporate fundamentals, often coordinating through online message boards.

In 2021, Bank of America identified Beyond Meat as a Reddit stock to watch, yet it ended that year down over 47%.

The resurgence of Beyond Meat may also indicate a broader trend in the market, as investors are increasingly drawn to speculative stocks despite high valuations, potentially signaling a market peak.

Roundhill had previously shut down its meme ETF due to lack of interest but revived it earlier this month as retail traders re-engage in this relentless bull market.