It's safe to say the recent IPO of Beyond Meat (BYND) has been a real winner for those who bought on the IPO and have held the stock up until this point. The stock has had an astronomical ride from the $25 IPO price to nearly $150 per share on the Friday squeeze. By any comparison, this is a very successful IPO. Congratulations are in order for the bulls who have made big money! Many people do not quite understand what's going on with this move, so maybe I can shed some light on the situation. There are several reasons why the stock has moved so far "beyond" belief...
1. With disappointing IPO's like Lyft and Uber, Wall Street needed a runner.
2. There is a cult like following from the vegan millennial crowd.
3. The float of the stock is pretty small for the stock price.
4. There is a high short interest which makes a stock much more squeezable.
5. It is a "story stock" that a wide range of people can understand.
6. It is not easy to get shorts and the interest is expensive for borrows.
7. The stock has been talked up greatly on televised and social media.
8. There are a lot of celebrities invested who have been hyping the stock.
While we recognize and understand why this stock has had legs, we also recognize that the stock has going far "beyond" where it should be priced. Early shorts have been taking a beating. Even famed short seller Andrew Left of Citron Research (whom I usually agree with) was sucked in early on this fiasco knowing that this was the exact type of story stock that he generally recommends staying away from. No trader can always get it right and lets be straight...In this dull bull market with politicians, corporations, deep state, and Fed behind it, short sellers have really not had much of a voice. It is what it is though. It's just the nature of the beast in this business we call "stock trading." With all of the volume and interest in this stock, it is great for trading. Unfortunately, the options have terrible spreads of nearly $3 at times. You can still play these, but need to get entry on the mid price. If the bid is $8 and ask is $11, place a limit order for $9.50. Up at these absurd levels, it may be good to take puts a few months out, but hedge by buying and trading some short term calls at support levels.
Valuation: Obviously low float stocks in a hot area can move well "beyond" what makes sense in terms of valuation. This is important as all of these overblown runners do eventually come back to reality. We saw this with the cannabis stocks when many exploded to outrageous multi-billion dollar valuations. Stocks like Tilray (TLRY) started with an IPO price of $25, ran up to $300, and is now back into the $30 area. Anyone with sense knows these types of valuations are not reasonable. Lets be honest, there is a lot of dumb money chasing BYND up here. But in this market however, the dumb money is making money! A lot of millennial's that don't usually trade have poured into this stock just like they did with cannabis. This has aided in creating massive short squeezes. With only $40 million in revenues, a $9 billion current market cap is "beyond" ridiculous. This is just plain fact and is even more unreasonable than Tilray market cap was near $300. The company also posted a $6 million loss and therefore is not profitable. Smart money will be taking profits after the recent earnings move. They will then wait for a solid correction and buy back in to hold as an investment if they believe in the long term viability of the company.
Product: There is certainly a trend among Americans (especially millennial's) of staying away from meat. And I do agree that there is good reason (killing methods, hormone injection, health concerns, etc). From an ingredients perspective, the burger it not really any healthier than other options and apparently the company itself does not claim health benefits. Fat and sodium content is about as high as a regular burger for example. In this Business Insider article, they explain that these plant-based burgers are not much healthier than fast-food burgers. Furthermore, despite what some claim, there is competition in this space and more is coming from some big players. Impossible Burger is just one example. In a four ounce uncooked Beyond Burger patty you will find the following...
Bottom Line: We believe this stock is due for a reasonable correction of at least 25% and so our target is $100 in the shorter term. BYND has already run well above most analysts amplified targets. Be smart and take some money off of the table. If you are reaping gains, avoid the urge to be too greedy. Do not forget what happened to those who got greedy with cannabis stocks like Tilray. They are now just wishing they locked in gains when they were there! Look more at puts and short opportunities up at these levels. Trade the stock based on support and resistance. And always keep in mind that "bulls make money, bears make money, but pigs get slaughtered." Good luck to all players long and short!
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The Federal Reserve (4th branch of government) has the U.S. stock market in a stranglehold. The damn thing is like an octopus with its tentacles out leaving slime all over the American people. Someone certainly appears to be pretty desperate to keep this bull market going. They will do whatever it takes to fool us into believing the economy has strength. The Fed is not supposed to be buying stocks outright as its not included as a power in Section 14 of the Federal Reserve Act, but I'm getting more and more suspicious that it could be happening. It truly feels some outside force with the same agenda is still propping us up big time. Most likely it's not the Fed themselves, but somebody very close doing the dirty work for them. A potential culprit would be someone like Government Sachs (Goldman). They have very close ties to government with many ex-employees working at different levels of politics. Current Secretary of the Treasury Mnuchin is just one example. This is the same guy putting out timely statements at key Dow Jones support levels. With people like this running government, of course they want stocks higher at all costs. What many don't realize is when the Fed buys trillions in bonds that money directly or indirectly trickles into stocks and acts like a shot of testosterone for the market. This is an economic strategy similar to Keynesian Economics (depression economics) that was developed by British economist John Keynes to better understand the Great Depression. Isn't the market running up a good thing you ask? Sure, for those investing in stocks who are smart enough to sell before the market comes back down. Until profits are taken, its just paper wealth. Longer term, when the market is running on artificial priming of the pump and not true economic strength, it destroys market credibility and leads to wealth destruction. Its like welfare for Wall Street elites in a sense and does not really benefit most of the American people (Main Street). The top 10% of American households own about 85% of stocks. These consistent market schemes, bubbles, and crashes aren't random but designed. It's no coincidence that artificial bulls always seem to last 10 years and then crashes in 2 years. Media, politicians, and whales are all part of it (some unknowingly). Media pundits are just parroting what the puppet masters tell them. It's slick and stealth, high-level, white collar crime. And it always ends up the same - with the theft of the American people.
After the 1987 crash Ronald Reagan created what is known as the "Working Group" (now called Plunge Protection Team). Basically, this group consists of the Secretary of treasury, Fed Chairmen, SEC, and Commodity Futures Trading Commission. Their purpose was supposed to be to fight volatility and restore investor confidence, but it likely was really about intervention in order to stop inevitable market crashes. Rumor has it, this is achieved by convincing banks to buy stock index futures or even having the Fed do it themselves. Does this sound like a natural free market to you? Of course it's not. There is nothing free about our stock market. In a free market there would be no Fed intervention whatsoever. Sadly, 90% of people in this world are living in a bubble and would never believe such a thing could happen. But its happening in plain sight and as clear as day.
If you look at current holders in the SPY ETF you'll see that Institutional ownership is around 82% (extremely high) and therefore its pretty much entirely controlled. You'll notice that big players like JP Morgan, B of A, Goldman, and Morgan Stanley have large holdings. With it locked up this much these whales can simply all agree not to sell and then push it higher with light buying to protect their interests. As you can see, some of these players own both calls and puts which encourages them to keep up the sideways but volatile trend we have been in. Many of the big players are in bed with the Gov. Hell, the Gov. pretty much took over Fannie and Freddie Mac during the mortgage crisis (more control). You will notice the interesting 117 mill stake by Parplus Partners. Apparently this is the only holding they have, which is a little strange. If you dig further it appears a Japanese company named Waizu Holdings is an indirect owner of Parplus. If we aren't careful, we will end up like Japan. They are still trying to recover from a bubble burst that was created in the same way (through artificial pumping). As financial institutions grow even larger and the Fed is allowed to take even more drastic steps, the danger increases for the public. When you add in non-transparent dark pools, algorithms, an high frequency trading you have a nearly entirely controlled market place.
The bottom line is the Federal Reserve needs to be audited and changes implemented. Wealth of the American people has been destroyed during these bubble crashes, the wealth gap is only widening, and very few politicians are actually addressing the problem. The few that are don't really have a plan. When the next inevitable crash comes its going to repeat the same story as 2008, but probably worse. To the elites it wont matter because they've made their money and the Americans will be left holding the bag again with more tax bailouts that don't fix (just enable) the same activities. Truth is, for the most part the elite politicians and other whales are not really interested in whats best for us. The Democrats and Republicans are so busy fighting each other for political power that nothing is getting done. Elections are just a dog and pony show to distract while the real power brokers continue to make moves behind the scenes. Most are really just concerned about their own interests. Presidents cant get much done anyway because Congress is so polarized. Until we all wake up and begin to fight back loudly we are going to head further down the path of more Gov. control. Schools don't teach you about what's really happening because they are Gov. entities. Our youth are naively support Socialism because they are being brainwashed so early. So, its up to you to self-educate. Motivational speaker Jim Rohn said "Formal education will make you a living, but self-education will make you a fortune." There are those who will deny this is happening of course and call it a conspiracy theory. But, there are plenty of facts. "Conspiracy theory" is a term invented by the CIA in the 60's as a means to attack anyone who challenges the "official narrative" (which is often a lie). They say the bigger the lie, the easier it is for people to believe. Well, let me tell you...We've been told a pack of lies and I'm tired of the baloney. I'm also tired of the American people getting sucked in and that's a big reason why I created this website...To help wake people up. It's time for us to get educated and get after it! And this needs to happen now, before its too late. It's our children that will pay the price!