During the COVID-19 years, things got downright weird…
I’m sure you remember. The lockdowns, social distancing, fights over vaccines, and “misinformation” divided the country and, arguably, engendered a lot of mistrust between people.
But our beat is markets. And looking back at the markets during that time, there was another phenomenon that was just as strange.
Locked in their homes and flush with stimulus money, people did one of the few things they could still do. They traded stocks!
Everybody, it seemed, was a stock trader. Everybody, it seemed, was a genius. People with no business using leverage “levered the F up.” Popular stocks – sometimes, for no apparent reason – went stratospheric. New retail-focused brokerages were happy to help.
An interesting fact: Even to this day, Robinhood Markets (HOOD) includes on its options platform guides like “I think the stock is going up” whenever you purchase call options. Let me tell you something – if you need that reminder before trading options, you probably shouldn’t be trading options.
Back then, one of the most popular names to trade was Beyond Meat (BYND). The company is a producer of alternative meat/alternative protein products. With hindsight, this company’s popularity may have been the weirdest trend to come out of the pandemic…
Beyond Meat had its IPO in 2019 and saw strong sales growth for its first couple of years as a public company. People were excited about the prospects of healthy, “green” protein alternatives that looked and tasted like the real thing. Personally, I never thought it did, but that’s beside the point.
The stock got a lot of attention during the COVID-19 years. From its IPO through May 2020, shares returned a little over 300%.
But in recent years, the company has struggled to stay relevant, wiping billions of dollars off of its market cap, resulting in major losses for investors.
Beyond’s year-over-year top-line growth has been negative every year since 2021. What’s more, the company has never produced a profit.
Demand for refrigerated plant-based proteins just isn’t there anymore. Inflation doesn’t help. It’s much cheaper to buy the real ground beef than Beyond Beef, for instance. The GLP-1 craze doesn’t help either. People are eating less because of new anti-obesity drugs.
Furthermore, it didn’t take long for people to question whether Beyond Meat’s products were actually healthy in the first place due to the highly processed nature of their products. All of this led to a $239 stock (in 2019) falling to just $0.50 per share by October 2025.
Beyond Meat looked to be just another failed experiment in the long history of capitalism. Any impartial observer would conclude it was a stock bound for the scrap heap.
But then, the real fun started…
Back from the Dead
Earlier this week BYND, shares spiked from all-time lows in the penny stock range to more than $7 per share. BYND experienced a 1,000%-plus rally in just a couple of trading sessions which made headlines.
What gives? What happened?
It’s about what you might expect.
From Yahoo Finance:
Beyond Meat has attracted a flurry of interest from traders on “wallstreetbets,” a Reddit forum. Traders have bragged of “yoloing” thousands of dollars on the stock or betting their “life savings” on the shares.
It’s the meme stock, guys. Because of course it’s the meme stock, guys.
More specifically, the news is that BYND was recently added to the Roundhill Investments Meme Stock ETF (MEME). And, yes, there are meme stock exchange-traded funds (“ETFs”).
However, as I watched the rally, I couldn’t help but to feel sorry for the people chasing momentum.
In the past, I’ve highlighted the astronomical rise and eventual fall of stocks like Zoom Communications (ZOOM). Post-pandemic, people were using all of that unexpected cash to buy into hype… while blissfully ignoring the fundamentals.
Wide Moat Research readers know what this type of behavior leads to – disappointment and regret. Heck, Brad wrote an open letter to the meme stock traders not so long ago.
The move higher in BYND was made possible because more than 60% of its shares were being shorted. These meme traders sparked an enormous short-squeeze rally.
And that’s how the stock of a dying business becomes a 10-bagger in a few days…
It Probably Goes Without Saying, but Don’t Buy BYND
Despite the squeeze, none of the company’s problems have been fixed.
Beyond Meat is still experiencing product demand issues. It’s still unprofitable. GLP-1 usage is still widespread. And while it’s true that the company is being more forthright and transparent about its ingredient list, its processed, artificial meat products are still way more expensive than the real thing.
I’ll never understand why so many people are interested in speculating on meme stocks. Oftentimes, these bets involve a contrarian – counter-cultural, even – mindset, usually built around a short-squeeze scenario.
Campaigns on social media inspire millions of retail investors to pile into subpar companies with hopes of getting rich quick while screwing over “the man” (institutional investor with large short positions).
And for some, it works.
But for many more, it doesn’t.
Undoubtedly, some people made a lot of money with BYND shares this week. But, like so many of the other meme stock rallies, I suspect that most of the people buying into the craze will turn out to be disappointed bag holders when the narrative changes and the meme stock attention is turned elsewhere.
Is Beyond Meat a 1,000% better company than it was a week ago?
Are its operations 1,000% more efficient?
Has the outlook for the company’s sales or profits jumped by 1,000%?
No. No. And No.
I’m sure it goes without saying… but don’t buy this stock. You might as well light a bundle of cash on fire. It’s the same thing.
In the short term, the market is a voting machine. But in the long term, it’s a weighing machine. And what it weighs are profits.
And here’s the bad news: Beyond Meat has no profits!
The meme mania is an interesting phenomenon, but it’s not worthy of your investment.
Stay disciplined. Stay rational. Stay the course.
And, to borrow from Brad, sleep well at night.
Regards,
Nick Ward
Analyst, Wide Moat Research
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