"Beyond Meat ( Nasdaq: BYND) is in the midst of a short squeeze with share up 75% so far today, which is a dramatic change after a historic 56% drop in share price after its $1.5 billion debt-for-equity swap announced on Oct. 13th. Today's surge is another example of dramatic short squeezes fueled by retail traders covering short positions and others buying to capitalize on the run-up."
"The turnaround follows Beyond Meat's early settlement of its convertible debt exchange announced last week. Nearly 97% of its $1.11 billion in 0% Convertible Notes due in 2027 were swapped for a mix of $196 million in new 7% Convertible Notes due in 2030 and 316 million new shares. This move quadrupled the share count and sent Beyond Meat share price over $2 to a low of $0.52 per share."
"Roughly 64% of Beyond's float remains sold short, setting up the squeeze as traders scrambled to exit positions. Trading volume exploded to 438 million shares, more than 30 times average turnover, with the stock climbing back over $1.20 as of 1 pm today. CEO Ethan Brown has framed the restructuring as "a meaningful next step toward reducing leverage and extending debt maturities.""
Beyond Meat experienced a dramatic intraday rally as shares jumped about 75% amid a retail-driven short squeeze. The rally followed an early settlement of a convertible debt exchange that swapped nearly 97% of $1.11 billion 0% Convertible Notes due 2027 into $196 million of new 7% Convertible Notes due 2030 and 316 million new shares. The swap quadrupled the share count and pushed the stock to a low of $0.52 after earlier debt-for-equity restructuring. Approximately 64% of the float remained sold short, prompting heavy short-covering and record trading volume of 438 million shares. Analysts warned that the debt relief caused massive dilution. Q3 earnings on November 5 represent the next catalyst.
Read at 24/7 Wall St.
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