Retail Traders Sending Beyond Meat 80% Higher Today

"Beaten down shares of Beyond Meat ( NASDAQ: BYND) are showing big signs of life today. Up about 80%, or 52 cents, to $1.16, volume on the alternative meat stock surged to 643 million, as compared to its daily average volume of 19.9 million. All thanks to massive short covering following news the company completed a debt-for-equity swap that changed the share structure announced on October 13."

"At the time, Beyond Meat issued 316 million new shares to bondholders in exchange for reducing part of its debt burden. This expanded Beyond Meat's outstanding shares from 76.7 million to more than 392 million. Investors weren't happy, seeing the swap as a major blow to shareholder value. So, they sold, cratering the stock by about 50%. Shortly after, as the newly issued shares began to trade, the stock began to take off, forcing short sellers to buy back shares, which fueled the short covering pump."

"The short-covering spree may be exciting for now. But we don't expect for it to last long. We also have to consider there's not a lot to get excited about under Beyond Meat's hood. In its second quarter, revenue dropped 20% year over year to $75 million, which was short of expectations. It also withdrew its full-year guidance. There's also the $1.2 billion in debt, and about $117 million in cash on hand."

Shares of Beyond Meat jumped roughly 80% to $1.16 on massive volume of 643 million, driven by short covering after newly issued shares began trading. The company issued 316 million new shares in a debt-for-equity swap, expanding outstanding shares from 76.7 million to over 392 million and prompting heavy investor selling that pushed the stock down about 50% before the short-covering rally. Recent fundamentals are weak: second-quarter revenue fell 20% year over year to $75 million, full-year guidance was withdrawn, debt stands near $1.2 billion, and cash on hand is about $117 million. The broader U.S. plant-based meat sector has seen notable sales and revenue declines, and analysts have cut price targets citing significant dilution.

Read at 24/7 Wall St.