Currently "the largest meme stock in the U.S.": Once the "leader in plant-based meat" Beyond Meat, surged 450% in a week, doubled overnight and then returned to its original position

The once-celebrated plant-based meat company Beyond Meat is experiencing a wild speculative frenzy. The struggling plant meat manufacturer's stock price surged by 112% during intraday trading on Wednesday, but then erased all gains, ultimately closing down 1.1% at $3.58, making it the most volatile trading target in the U.S. market.

On Wednesday (October 22), the company's stock price briefly soared by 112%, but completely retraced its gains during the session, ultimately closing down 1.1% at $3.58, although the cumulative weekly gain still exceeded 450%. According to FactSet data, over 2 billion shares of Beyond Meat changed hands on Wednesday, making it the second most traded stock in the U.S. market, with options trading volume also hitting a record high.

This surge was fueled by the company's announcement on Tuesday that Walmart will expand its product distribution to over 2,000 stores, including a newly launched six-pack "value pack." Just the week before, Beyond Meat had announced a debt swap agreement that significantly diluted shareholder equity, causing its stock price to briefly fall below $1 and hit a historic low of $0.52 on October 17.

Despite the stock price surge, Wall Street analysts remain skeptical about the company's prospects, with the stock currently holding 6 sell ratings, 5 hold ratings, and no buy ratings. Matt Maley, Chief Market Strategist at Miller Tabak + Co., stated: "This absolutely indicates that the level of speculation and bubble in the market remains extremely high."

Retail Frenzy Resurfaces: WallStreetBets Forum Becomes the Main Battleground

Beyond Meat has become the latest case in the resurgence of meme stocks. According to media reports, Roundhill Investments added Beyond Meat to its meme stock ETF this past Monday, which specifically tracks high-momentum, high-volatility stocks favored by retail investors.

The online investment forum WallStreetBets was flooded with posts betting on Beyond Meat on Wednesday. "I will hold and buy more tomorrow! Already have 30,000 shares. Let's go!" one user wrote, filled with exclamation marks.

According to Cboe Global Markets data, a record 1.9 million call option contracts changed hands on Tuesday. Among the most actively traded Beyond options contracts, some bets are placed on the stock price jumping to $9, or even $40.

Some social media users discussed initiating a "short squeeze" action against Beyond Meat similar to the 2021 GameStop incident. As of the end of September, approximately 64% of the tradable shares had been sold short. One user wrote on the Reddit forum StocksToBuyToday:

"This is not about becoming a millionaire investor or betting your savings. It's about something more important: the power of the people. Hedge funds and large institutions bet on failure—not because they know the future, but because they think you won't care."

According to Business Insider, a trader named Demitri Semenikhin has been recommending the stock on social media, which may have further fueled the stock price surge on Monday.

Walmart's Expansion of Distribution Fails to Restore Confidence?

On Tuesday, Beyond Meat announced that Walmart will expand the sale of its products in over 2,000 stores, including the newly launched six-pack "value pack." This news provided new momentum for Tuesday's rise.

AJ Bell's financial analysis director Danni Hewson stated:

"If sales follow up, the agreement to increase distribution is certainly good, but looking at consumer sentiment towards meat alternatives, it is clear that Beyond Meat faces significant challenges. The current trading frenzy seems more related to a short squeeze than a genuine shift in investor interest in the stock."

This once-popular brand gained traction during the pandemic when more people turned to healthier alternatives. However, this trend has not continued, and the brand has since struggled, with consumers increasingly troubled by over-processing, high costs, and taste issues.

Ethan Brown told analysts during the earnings call in August that the company hopes to counter misinformation surrounding its products and lower prices. "There will be these cultural moments," Brown said on the call, "and we just happen to be on the other side of this particular moment."

Hewson stated:

"Beyond Meat may still turn things around, but this turnaround must be based on high-quality products that can recapture the initial interest by capitalizing on current dietary trends and providing the kind of value that today's consumers need."

From Star IPO to Troubled Waters

Beyond Meat was once the darling of investors.

During its IPO in 2019, the company's stock price doubled on its first day of trading, becoming the largest first-day gain among companies that raised over $200 million since the peak of the dot-com bubble. Enthusiasm for meat alternatives and partnerships with restaurant and supermarket chains once pushed Beyond's valuation to over $10 billion.

But as sales growth slowed and the company continued to incur losses, investors lost confidence in the stock. In 2022, Beyond's stock price plummeted over 80% for the year. For most of the past year, the stock has traded in the range of $2 to $4.

Currently, the company faces severe operational challenges. Annual sales have declined for three consecutive years. Under inflationary pressure, Beyond's high prices have deterred some consumers, while their focus on protein has led them to frequent the meat counters at supermarkets.

According to media reports last year, the company has been in talks with bondholders regarding a balance sheet restructuring plan to improve liquidity Last week, Beyond announced the preliminary results of its debt swap agreement, involving the issuance of millions of new shares, which led to a 49% plunge in its stock price on October 13. The company's founder and CEO Ethan Brown has resigned from the board