- Beyond Meat gained more than 15% in pre-market trading Tuesday.
- The jump in shares extended a rally from news of a newly announced ground beef product and shortages of the Impossible Burger.
- Short sellers have lost hundreds of millions of dollars betting against shares of the plant-based meat alternatives company as its shares have rallied.
- Watch Beyond Meat trade live.
How high will Beyond Meat go?
Shares of the plant-based meat alternatives company ballooned more than 15% in pre-market trading Tuesday, continuing a run on news of a new ground beef product and potential shortages from a major competitor.
The stock is now sitting around $US197 per share, nearly eight times the IPO price of $US25. That’s a 688% gain since the IPO in early May.
The company confirmed Monday that its new plant-based ‘ground beef’ product will be available in grocery stores starting June 24, which sent shares up as much as 10%. That headline extended a rally from Friday, when a report that restaurants Red Robin and White Castle had experienced shortages of Impossible Burgers, a major competitor to Beyond’s burger.
Short sellers have absorbed losses totaling $US560 million during the stock’s meteoric rise, through Monday’s close, according to data-analytics firm S3 Partners.
Those betting against the stock have had to grapple with extreme borrowing fees as it became more expensive to short the stock than to own it, an ‘extraordinarily rare’ situation according to Ihor Dusaniwsky, the managing director of predictive analytics at S3.
Still, there is little evidence of a short squeeze, or short sellers exiting the trade. Instead, it appears that any shorts leaving the trade are being replaced by new ones, according to a Bloomberg reportMonday.
Shares of Beyond Meat are trading up as much as 680% year to date.
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