From rally to rout: Beyond Meat keeps sliding after disappointing 3Q earnings

Shares of plant-based meat producer Beyond Meat fell more than 8% in early trading today, November 11, which makes them about a third of their price at the peak of last month's meme rally. The drop followed delayed third-quarter earnings showing weaker performance across all indicators and a subdued outlook. Against this backdrop, law firm Edelson Lechtzin LLP has just launched an investigation into whether Beyond Meat may have violated securities laws.

Beyond Meat shares are down more than 8% at $1.23 per share in premarket trading this morning.

The company released its third-quarter results yesterday. Net revenue fell 13.3% year over year to $70.2 million, though the figure was within the company’s previously guided range and 1.7% above the FactSet consensus forecast, MarketWatch reported.

According to the company, the decline was driven by weak demand for plant-based meat, reduced retail distribution, and lower burger sales at international fast-food chains. Beyond Meat warned that uncertainty remains elevated and said this could continue to weigh on future results. It projects fourth-quarter revenue of $60-65 million, at least 7.3% below the FactSet consensus of $70.1 million.

The past month has been turbulent for Beyond Meat. On October 14, a Reddit user urged traders to “make $BYND great again,” claiming the stock “deserves a [short] squeeze." "This isn’t just a veggie burger anymore, it’s a symbol of rebellion... It’s a company that Wall Street gave up on and now it’s us, the people, who decide its value,” another post read.

The rally was fueled in part by a video posted by Dubai-based retail trader Dimitri Semenikhin, known online as Capybara Stocks, who claimed to have bought a 4% stake in Beyond Meat. He posted the video to YouTube on October 19. In addition, Roundhill Investments added Beyond Meat to the Roundhill Meme Stock ETF. The move helped trigger a short squeeze as bearish investors rushed to cover positions. More than 63% of the free float was sold short at the time, according to FactSet data cited by CNBC.

Beyond Meat also announced plans to expand its partnership with Walmart, the largest U.S. retailer.

These catalysts sent the shares soaring. During the four-day rally, the small cap rose nearly 1,400%, and short sellers lost about $120 million, according to Business Insider.

The reversal came quickly. On October 24, Beyond Meat announced a significant noncash impairment charge on certain assets, triggering a more than 23% drop in the stock. In early November, it postponed the third-quarter earnings release to assess the size of the impairment, causing another 18% decline in a single session.

The sequence of events drew the attention of Edelson Lechtzin LLP, which is examining "potential violations of the federal securities laws involving Beyond Meat, Inc., resulting from allegations of providing potentially misleading business information to the investing public."

Beyond Meat’s shares have fallen 65% year to date. Wall Street remains skeptical about the company’s stock-market prospects, though sentiment has slightly improved, MarketWatch data shows. Four analysts now rate the stock “sell,” three recommend “hold,” and one advises “buy.” A month ago, there were no “buy” ratings.

The AI translation of this story was reviewed by a human editor.