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- Beyond Meat stock has rallied for the last week, and retail traders are piling in.
- A Dubai-based trader who's been helping to push the stock higher with his bullish outlook shared his view on what's next.
- He cautions against chasing gains in the highly volatile stock.
Dimitri Semenikhin didn't expect his bullish posts about a beaten-down faux meat maker's stock to get much attention, but his thesis has been at the center of retail traders' latest meme-stock craze.
When Semenikhin posted hisBeyond Meat outlookon Reddit under the moniker Capybara Stocks, he said he simply saw an opportunity to share his take on a company he thought was undervalued. A week later, Beyond Meat is in the midst of a GameStop-like frenzy, surging $0.50 a share to nearly $7.
Semenikhin told Business Insider on Wednesday that the stock could go higher based fundamentals, but he warned that it's clearly no longer trading on that basis anymore.
"Fundamentals I think suggest a trading range of $6-8 in the medium term," he told Business Insider over text message. "However, that is really not what it's trading on at the moment, more of a short squeeze coupled with retail frenzy."
The Beyond Meat stock surge has far exceeded Semenikhin's expectations, and the event has drummed up comparisons to theGamestopmania kicked off by Roaring Kitty, aka Keith Gill.
Semenikhin has advised other retail investors to avoid taking unnecessary risks, while also saying that he thinks it's hard to say how much higher the stock can go.
The rally was showing signs of exhaustion on Wednesday by midmorning. Shares started the session up nearly 80%, but had reversed course for a gain of just 4% close to midday.
Semenikhin said he'd seen call options with high strike prices changing hands, suggesting that traders still the potential for a more dramatic short-squeeze to push the stock up even after huge gains in the last week.
His bullish outlook argues that a recent note exchange with Beyond Meat bondholders to swap debt for new equity was misinterpreted by investors as a bearish development. In his view, the move improves Beyond Meat's financial position while also setting the stage for a short-squeeze.
Regarding Wednesday's gains, Semenikhin said that the Beyond Meat rally is notable among other trades he's put on recently.
"This one really stands out in the tremendous community that has built up around it and really shows what a community that comes together can do even in a short amount of time."
