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Why Beyond Meat Stock Jumped Today

By Howard Smith - May 27, 2021 at 9:53AM

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An influential stock picker says the company should be the next meme stock.

What happened

Shares of plant-based meat producer Beyond Meat (BYND -4.29%) jumped Thursday morning for what some might consider a surprising reason. As of 10:15 a.m. EDT today, shares were up more than 13%. 

So what

The surge is likely the result of some commentary from CNBC's Jim Cramer. On his Mad Money show Wednesday night, Cramer said the WallStreetBets crowd should make Beyond Meat the next meme stock to drive a short squeeze. The comment came after recent gains in stocks including AMC Entertainment Holdings (AMC -9.69%) and GameStop (GME -6.39%) brought back visions of exponential gains in January as Reddit forum users banded together to push those shares higher. 

stock chart with rocket showing shares about to rocket higher.

Image source: Getty Images.

Now what

Cramer specifically noted that Beyond Meat has about 25% of its shares held short, setting up a scenario that could result in sharp gains from a short squeeze. High short positions were the trigger that drove users of Reddit's WallStreetBets forum in January to force short covering in GameStop. The result was an exponential rise in the share price, surpassing what most anyone believed had any fundamental business explanation. 

Cramer was making two points with his suggestion yesterday. First, he is a believer in the underlying business and thinks Beyond Meat has a long runway for growth. But he was also pointing out that the retail-trading crowd that spurred the frenzy earlier in the year continues to have power in numbers, and could create a show of force in the stock market again. Long-term investors should focus on the former. Those who want to try to time gains from a short squeeze should only play that game with gambling money. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Beyond Meat, Inc. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Beyond Meat Stock Quote
Beyond Meat
$33.22 (-4.29%) $-1.49
GameStop Corp. Stock Quote
GameStop Corp.
$37.93 (-6.39%) $-2.59
AMC Entertainment Holdings, Inc. Stock Quote
AMC Entertainment Holdings, Inc.
$19.29 (-9.69%) $-2.07

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