Short-sellers are getting absolutely slaughtered by the likes of an alternative to meat company known as Beyond Meat. The excitement in the market around this company is undeniable. It is estimated that short-sellers lost nearly $400 million dollars just in the last week as the stock climbed by 39% on Friday and another 21% on Monday. It is up almost 600% since it’s IPO just about one month ago.
Some of the largest short-sellers against this stock have made moves to cover their best and stem the losses as best they could at this point. It has really not been easy for them, but at least they can collect what chips they have left and try to salvage something.
Investors seem to be excited about the idea of a company that provides food products that are alternatives to meat to an increasingly health-conscious consumer. Millennials in particular have been keenly interested in going meatless and make up a large portion of the market that Beyond Meat serves. They are looking for ways to improve their own health as well as the health of the planet.
The number of shares out for Beyond Meat is rather small according to CNBC, and this has left many short-sellers scrambling to find shares to buy to cover the bets that they made earlier against the stock. A lot of short-sellers have been attempting to do this all at the same time, and that has resulted in what is known as a “short squeeze”. This is a spike in prices due to the fact that there are so few shares to cover those shorts. When many shorts are attempting to buy all at the same time it drives the price higher.
The short-sellers are not exactly done making their argument even if they may be at least temporarily done short=selling the stock. Some have continued to publish negative stories about the company and its stock. They insist that the pricing for this company has gotten completely out of line and that superior competition is on its way. They say that it will surely crash back down to more reasonable prices in the near future. However, right now it just seems like the company wants to continue to run. What can a person do but stand back and gasp when a stock continues to climb higher by almost 600% from where it was just about one month ago?