Friday, July 26, 2019

In Pre-Market Trade, Beyond Meat Is Approaching Escape Velocity (BYND)

Via FinViz, the stock's trading history through yesterday's close:

BYND Beyond Meat, Inc. daily Stock Chart

Recently (07:26:07 EDT) changing hands at $244.44 up $21.58 (+9.68%)
That's some damned nice verticality!

And from ZeroHedge: 

Beyond Volkswagen: BYND Shorts Crucified As Borrow Fee Hit 144%
Two months ago, in mid-May, we warned intrepid contrarians against shorting the latest cult "story" stock, Beyond Meat - which on May 1 completed the strongest IPO since the 2008 financial crisis - for two reasons: some 43% of Beyond Meat's float was sold short, making BYND one of the top 20 most-shorted U.S. companies, and the borrow fee was approaching triple digits, meaning one would have to double their money, i.e. the stock would have to drop to zero, in a year just to break even.
Well, since then what we back then dubbed a "beyond Volkswagen short squeeze" has only gotten worse, and today the stocks has exploded higher once again, rising 8%, and is now an absolutely mind-blowing 775% higher from its IPO offering price of $25:
Sadly, for those shorts hoping that the relentless squeeze higher may soon be ending we have bad news. Not only has deluge of shorts not eased, but according to the latest data, there were 5.5 million shorts, which is a record 47% of the stock float, making it one of the 10 most shorted companies in the US stock market!.......MORE
We too had our little warning:
How Beef Magazine Covered Beyond Meat's IPO (BYND)
From Beef Magazine, Jun 20, 2019:
Fake meat goes public
Judging by investor reaction to Beyond Meat’s initial public offering last month, there’s at least the perception of a growing appetite for meat substitutes....MORE
I've been asked why we haven't posted on BYND despite our dozens of posts on alt-protein.

He who sells what isn't his'n, Must buy it back or go to prison.
-Daniel Drew
Wall Street speculator*

*That's a bit of understatement. He was probably the first great American speculator. And he knew all the tricks. In addition to his comment on short-selling he applied the term "watered stock" to finance.
In 1867 the owner of the New York Central Railroad, Cornelius Vanderbilt, decided to buy the Erie Railroad out from under Uncle Dan'l.

Drew responded by the tripling the outstanding stock with illegally issued shares.
Good times.

**In 1863 Uncle Dan'l had shorted the New York & Harlem Railroad and then conspired with municipal officials (who were also short) to revoke their previously granted approval for the railroad to lay track from south of Union Square to the Battery. Vanderbilt, had been building a position starting in the $8-9 range because of the railroad's strategic value. The stock advanced to the $50 range after it became apparent that the Commodore was interested in taking control. After the City Council approved the laying of track the length of Broadway the stock advanced to $75. Enter Drew et al.

Vanderbilt absorbed every share the shorts sold to him and ended up with the entire float.
He allowed the shorts to settle at $179.
[there is some dispute whether Drew got caught in the first Harlem corner. -ed]

In 1864 Vanderbilt decided to bypass the aldermen and went to Albany to get the State's okey-dokey.
Uncle Dan got wind of the plan, went long, got the legislators on the bandwagon and ran the stock to $150.
The plan was to sell, go short and defeat the bill.

The stock dropped from $150 to $100 in two days.
This time Vanderbilt bought 137,000 of the 110,000 shares outstanding. Uh oh.
He was so pissed that this had happened again that he said he'd let the shorts out at $1000 but eventually settled at $285.


"Large Investors, Price Manipulation, and Limits to
Arbitrage: An Anatomy of Market Corners"
Wharton, 2006 (49 page PDF)