John Raoux/AP
- Beyond Meat was down almost 20% before the opening bell on Thursday.
- The new meme stock jumped 1,000% in four days after a Dubai-based trader shared his bullish thesis.
- AJ Bell investment director Russ Mould said it was not clear what the buyers' plan was.
Beyond Meat, the latestmeme stock, fell in premarket trading on Thursday, after surging through the week and paring in Wednesday's trading.
The plant-based food company, known for its vegan burgers, was down nearly 20% to $2.89 a share at 7.53 a.m. ET, after the stock soared 112% in Wednesday's trading, reaching a high of over $7 — a 1,000% rise in four days — before closing at $3.58.
Appetite for Beyond Meat began to grow last week when Dubai-based traderDimitri Semenikhinposted on Monday that he had bought 4% of the shares outstanding and released a video explaining his enthusiasm for the stock.
The trader, who goes under the moniker "Capybara Stocks," said in the video that the company's "bullish" move of selling stock for nearly $3 to repay its debt removed "its previously high risk of bankruptcy" and "greatly" strengthened its balance sheet.
In a Thursday note about Beyond Meat and fellow meme stock Krispy Kreme, AJ Bell investment director Russ Mould wrote, "Quite what plan the buyers of Beyond Meat and Krispy Kreme have remains to be seen, although long-term, efficient allocation of capital does not necessarily seem to feature.
"That may be of no concern to those who are confident that there are quick profits to be had, but previous efforts to squeeze short sellers in this stock ultimately failed and it is hard to push around the price of a security or asset on a sustained basis."
