Market top signal? Meme stock craze reappears, Beyond Meat rises 6 times in three days

The food company Beyond Meat, known for its plant-based meat substitutes, has recently seen a strong surge, performing astonishingly. After a 127% spike on Monday, the momentum did not stop, with a further increase of over 146% on Tuesday, marking the largest single-day gain in history.

The cumulative increase of Beyond Meat over the last three trading days has reached approximately 600%. As of Tuesday's close, Beyond Meat's stock price was around $3.60 per share, compared to just 65 cents at last week's close, with a low of 50 cents at one point.

On Monday, Roundhill Investments announced the inclusion of Beyond Meat in its thematic ETF, the Roundhill Meme Stock ETF (MEME), which propelled Beyond Meat's surge that day. On Tuesday, Beyond Meat announced an agreement with Walmart to expand its distribution in more stores across the U.S., further driving the stock price up.

Recently, Beyond Meat's performance has been quite dramatic, representing a complete reversal compared to last week. Last week, Beyond Meat saw a cumulative drop of over 67% due to the announcement of a debt agreement.

In fact, Beyond Meat's stock price has recorded negative returns for five consecutive years. Since its IPO in 2019, the stock price once soared above $230 per share, but has since declined significantly, becoming a "penny stock."

Media analysis suggests that the inclusion in the ETF triggered a short squeeze, forcing investors who had shorted Beyond Meat's stock to cover their positions. According to FactSet data, over 63% of Beyond Meat's float had been sold short.

This week's surge in Beyond Meat recalls its glorious days as a meme stock favored by retail investors—when retail traders coordinated actions on online forums, buying the stock based on sentiment rather than company fundamentals. In 2021, Bank of America even referred to Beyond Meat as "one of the Reddit favorites," yet the stock still fell over 47% that year.

Some analysts point out that Beyond Meat's "resurrection" may also signal the re-emergence of market bubbles—despite high valuations, investors continue to flock to these highly speculative stocks, which could be a sign of a market top approaching.

It is worth noting that Roundhill had previously closed its meme ETF due to insufficient investor interest, but relaunched it earlier this month as retail funds flowed back into this unstoppable bull market.

An earlier article on the Wall Street Journal website pointed out that the painful lesson of Beyond Meat's stock collapse once again demonstrates how Wall Street's hype machine can package a seemingly revolutionary concept into an investment bubble: persistent losses, intensified competition, high pricing, and low customer retention rates are dangerous signals masked by fervent market sentiment