The ‘Short Squeeze’ is a tactic the stock-savvy sometimes use to boost the price of shares in a company that’s not doing so well. After such a squeeze recently, Beyond Meat shares rose 1,300 percent – for a day, at least…
‘Meme’ Stocks
When the squeeze is applied to forlorn stock issues, there sometimes referred to as ‘meme stocks’. Another way to describe them might be ‘pumped. But there’s a thin line between mostly-harmless ‘meme’ trading and the nefarious Wall Street ‘pump and dump’.
Yahoo! Finance reported that a Dubai stock trader had been promoting Beyond Meat shares posting on Reddit and sharing YouTube videos talking-up the stock.
“Shares of BYND were up another 72 percent to $6.24 at the beginning of trading [the next day], down slightly from a high of $7.33 earlier in the pre-market hours (which represented a 1400 percent in-crease). [The day after that], shares were as low as 52 cents,” Chris Morris wrote.
Short-lived fame
“Despite the excitement, Beyond Meat is still a long, long way from its glory days,” Morris added quickly. “It débuted at more than $230 per share and has dropped steadily ever since. Even with the recent burst of retail investor activity, it’s still down 8 percent percent in the past 12 months.”
Other factors in play
Yahoo! said $5.9 billion in shares changed hands on one trading day alone — more than four times the company’s value. However, investors may also have been reacting to news that the Beyond Meat products will soon be available at more Walmart stores.
Nevertheless, one Reddit user commented, wryly: “You know the economy is cooked when BYND stock is making a comeback…”
My take
Was it just a meme move? Or a pump-and-dump?
In posts about Beyond Meats meteoroic rise – and subsequenbt sell off – Reddit’s r/wallstreetbets acknowledged. Some see meme stock investing as relatively harmless, the thread noted. But, “it adds another layer of volatility to an already uneasy stock market — and there’s always the risk of this being a pump and dump scheme.”
We may never know or sure…
~ Maggie J.