How far can Beyond Meat go as a meme stock?

When vegan food producer Beyond Meat (BYND) announced on Tuesday that it had landed a distribution deal with Walmart (WMT), it made sense that its stock would rise on the news.

Walmart is after all the largest retailer in the world, so getting its products in the retail giant’s stores was a big win for Beyond. The company said that three of its plant-based products would be sold in over 2,000 Walmart stores across the US.

Shares of BYND soared more than 80% on Tuesday after the Walmart deal was announced. Although news of the deal would be expected to trigger a gain in Beyond’s stock, it was nonetheless a surprisingly massive surge.

After all, five of the eight Wall Street analysts who cover Beyond have it as a Sell or Strong Sell, while the other three have it as a Hold. In other words, this is not a stock that has had a lot of momentum this year.

But while Beyond’s stock might not be favored by Wall Street, it is the most watched on Stocktwits, a favorite hub for retail traders. In fact, on the day that BYND gained 80%, more than 1.2 billion shares of Beyond traded hands, according to Reuters.

The stock rode this retail momentum and skyrocketed more than 1,300% over four days. Bloomberg, which called Beyond “the beleaguered plant-based protein producer” noted that the company’s shares went from an all-time low to a 14-month high in that four-day span.

This wild rally caused short sellers to lose $120 million in paper losses, a $45 million swing for the short bets, Bloomberg reported, citing data from S3 Partners. Before the aggressive rally, short sellers had pocketed nearly $80 million in paper profits off Beyond shares this year.

This led to a short squeeze, where the bears rushed to cover their short positions by buying up the stock, further fueling the rally.

Every meme boom meets a bust

Business Insider reported that a Dubai-based day trader named Dimitri Semenikhin was behind the rally, taking to social media and YouTube to explain why he’d taken a 4% stake in BYND shares, using a similar tactic that Keith Gill (aka Roaring Kitty) used to launch the infamous GameStop memestock rally.

However, on Wednesday, Beyond shares began to turn negative.

“At 5:15 AM ET, Beyond Meat, $BYND, became a $3.5 BILLION company, just 6 days after hitting a record low of $195 million,” The Kobeissi Letter noted on X. “7 hours later, the stock erased a +160% gain and was down as much as -31% on the day, worth $1 billion. What is happening here?”

Years before it became a memestock, Beyond Meat had once been worth $14 billion, riding a wave of enthusiasm for plant-based meat that saw fast-food giants like McDonald’s (MCD) adding vegan burgers to its menu.

But sales of plant-based food have plummeted, due in large part to consumers souring on the expensive products.

Since 2022, sales of plant-based meats have seen double-digit year-over-year declines, including a $279.3 million drop over the last 12 months, as Reuters noted, citing data from market research firm Citcana.

Beyond now has a market cap of $1.3 billion and last month launched a debt-for-equity swap in an effort to avoid near-term default on its credit. This caused a significant dilution of its stock.

While the brief rally may have briefly corrected some of that dilution, it didn’t last. Beyond plunged another 20.7% on Wednesday.

“The memestock’s rally appears to have come to a tragic end,” The Kobeissi Letter said on X.