Please ensure Javascript is enabled for purposes of website accessibility

Why Beyond Meat Stock Jumped Today

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

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

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
394%
 
S&P 500 Returns
127%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.