Beyond Meat Stock Surges on PepsiCo Partnership. There Could Be More Behind the Move.
Beyond Meat and PepsiCo are teaming up.
Drew Angerer/Getty Images
Beyond Meat stock soared Tuesday, after the maker of alternative meat said it had inked a partnership with PepsiCo —although there could be more to the move.
Beyond Meat (ticker: BYND) and PepsiCo (PEP) announced a new joint venture, The PLANeT Partnership, in which the food makers will “develop, produce and market innovative snack and beverage products made from plant-based protein.” The two companies hope to use Beyond Meat’s faux-meat technology with Pepsi’s marketing and distribution infrastructure. Financial terms weren’t disclosed.
Beyond Meat stock jumped 25% to $198.33 in recent trading; Pepsi was 0.4% higher at $140.76.
Beyond Meat stock is well known for big pops on news of partnerships with established food brands. Earlier this year, the shares jumped 14% on Beyond’s deal with Yum! Brands’ (YUM) Taco Bell. In late 2020, the stock soared nearly 10% after the company said it was expanding its distribution with Walmart (WMT). Likewise, the shares swooned 20% after McDonald’s (MCD) announced its McPlant initiative, as the company, in keeping with past practices, didn’t confirm it was using the Beyond Meat’s products.
However, there might be more going on than just excitement over the Pepsi news. With just over 38% of its shares sold short—meaning positions that bet the stock will fall—Beyond Meat stock could be caught up in the recent frenzy of speculative trading that has engulfed popular bearish trades. In other words, investors might be racing to reverse their bets that Beyond stock will fall, otherwise known as a short squeeze.
GameStop (GME) is the recent poster child for this. The shares, which are jumping 17% again at recent check, have soared 332% since the start of the year. This short squeeze has caused bears to get creative, but it has also spilled into other stocks with high short interest. Bed Bath & Beyond (BBBY) stock is another example. It was hit with two downgrades today, as analyst are unwilling to keep raising their target prices after the shares surged more than 70% in just over three weeks.
With a more than 60% year-to-date climb, today’s jump, and high short interest, Beyond Meat seems like a prime candidate to include in this group—even if its deal with Pepsi is ultimately accretive to the business.
Write to Teresa Rivas at [email protected]
