Yesterday Beyond Meat Inc (BYND) reported 3rd quarter results which beat analystsâ€™ sales and earnings estimates and its stock price jumped +4.5%. Today we are seeing a reversal of fortunes as BYNDâ€™s lockup expiry has triggered a -18% drop in its stock price. Short sellers, who were down over $1 billion in mark-to-market losses when BYND hit its post-IPO high of $234.90/share on July 28th, have recouped more than half of their losses since the end of July. BYND shorts are up +$272 million in mark-to-market profits in October, including +$110 million today.
BYND short interest is $594 million; 5.64 million shares shorted; 43.49% of its float, and a 56.81% stock borrow fee which continues to ease. With BYNDâ€™s lockup expiring we are expecting BYNDâ€™s float to increase significantly. Short interest as % of Float should decrease to the 11% – 15% level and stock borrow rates should drop below the 10% fee level as more shares hit the stock loan lendable market.
BYND is the 9th largest short in the Packaged Foods & Meats sector and would certainly be higher in the league tables if stock borrow rates were not above the 100% fee level since early September. Stock borrow availability will expand due to the sales of a sizeable amount of insider stock into stock lendersâ€™ portfolios over the next few days. The resulting increase in stock borrow availability and decrease in stock borrow rates, due to the lockup expiry, will make shorting BYND stock more attractive as future financing costs will eat up less of expected Alpha.
BYND shorts are down -$449 million in net-of-financing mark-to-market losses year-to-date, -$435 million of those losses, or 97%, are stock borrow costs. We expect not only more shorts to entering the BYND short trade, but also existing shorts increasing their exposure as the cost to short BYND decreases. With both pre-IPO longs selling stock to realize profits and shorts jumping into both momentum and value trades we should see continued BYND price weakness in the short term as the stock gets hit from both the long and short side of the market.
Want deeper insight into the above analysis?
Contact:Â [email protected]
Managing Director Predictive Analytics, S3 Partners, LLC
For more information on S3â€™s reporting, data and analytics solutions, email us at [email protected]. Start your free trial of the BLACK App â€“ the only source of real-time short interest on the Bloomberg Terminal or Thomson Reuters Eikon.
For short side data and access to our research reports go to https://shortsight.com/ .
The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (â€śS3 Partnersâ€ť) to be reliable and accurate.Â Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use.Â Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decisions.