Beyond Meat Shares Surge 1,400% Due To Meme Stock

Beyond Meat, which uses the ticker symbol BYND on the NASDAQ stock market, has just witnessed a huge market surge, rising almost 1,300%.

On October 15, shares had reached a high of $7.33 in the pre-market hours, which represented a 1,400% increase, before settling at $6.24 once trading kicked off. Before the surge, shares were considerably lower at just 78 cents.

What caused the sudden surge? According to Yahoo!, a Dubai-based trader named Capybara Stocks, who has been, more or less, promoting the stocks via social media, Reddit, and YouTube. Stocks that go viral on social media have been cheekily named “meme stocks” and are inherently volatile due to online speculation.

The practice is called a “short-squeeze,” which is when professional investors short-sell a stock based on the assumption that it will decline. Short selling is when investors sell stock options before they decline in value, in hopes of re-purchasing them at a lower price. A short squeeze occurs when amateur investors buy up shares during a short sell, causing a noticeable increase in the price. In response, professional investors rush to re-purchase the shares they sold, driving up the price even more. 

Remember the GameStop stock surge in 2021 that stirred up controversy? That was caused by a short squeeze. Sadly, short squeezes don’t result in much more than sudden spikes that rapidly fizzle. Today, for example, BYND shares cost just $2.94, a far cry from $7.33, let alone $230, the price that a single share cost when it first debuted on the NASDAQ.

The price has only fallen since, and more concerning, Beyond Meat is down 8% overall this year.