December 9, 2019 10:42 AM RSS

Beyond Stupidity

  • Wall Street Rebel | Geoff Garbacz
  • 07/30/2019 3:27 PM
Beyond Stupidity
Every year there are IPOs that run out of the gate until they crash in spectacular fashion. Beyond Meat (BYND) is no exception. The stock came public on May 2nd. It closed the first day of trading and ran to a peak of $239.71 last Friday. The company produces and sells plant based meat to the retail and wholesale market.

It closed yesterday at $222.13. Today it is at $195.76. Why the drop. Earnings missed yesterday as they reported a loss of $-0.24 against estimates of $-0.08. Revenues came in at $67.3 million against estimates of $52.71. So a beat on the top line but earnings struggled.

The company then announced they were going to do a secondary offering of 3.25 million shares after earnings were reported. The sellers of 3 million shares were shareholders and not the company. Never good. Simply people cashing out.

In addition, many have been talking about this stock being a massive short squeeze. Hardly, the case. reports the company is trading 8.96 million shares a day. There are 5.45 million shares short. So it would take the shorts less than a day to cover. Hardly, a squeeze.

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The short to float is 31% which tells us how many shares are free to trade but it does not relate to the pain potential for shorts. They can cover in a day if they want to. Hardly the squeeze. The media would have you believe otherwise when the use short to float as their metric.

Why the hype then? Because the media and CNBC have decided it is a good story even if the reporting is wrong. Sooner than later this stock will be back below its offered price.

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