(Bloomberg) — Short sellers are piling into Beyond Meat Inc., making it the most shorted company in the Russell 1000 Index, as the shares struggle to gain momentum amid growing competition for plant-based meat.
Short interest stands at 37% of the company’s freely traded shares, the highest among stocks in the Russell 1000 Index, according to the latest data from financial analytics firm S3 Partners. That’s risen from 26% at the start of October, and the move by sellers has picked up pace with short interest relative to tradable shares jumping more than 3% just last week.
Beyond Meat didn’t immediately respond to an emailed request for comment.
When Beyond Meat went public in May 2019, it held one of the most sought after initial public offerings, and jumped 163% on its debut. But the company is struggling to turn the initial buzz into durable investor support. Beyond Meat shares have dropped 46% over the past 12 months, compared with a 21% gain for the Russell 1000 Index.
The company’s last sales forecast disappointed analysts, with Taco Bell then canceling a planned test of a Beyond Meat product, while the competition is closing in. The likes of Nestle SA are investing in vegan startups and Chipotle Mexican Grill Inc. will sell its own pea-based chorizo.
Beyond Meat and the plant-based meat category as a whole are facing a more difficult outlook, as it appears the products will reach far fewer American households than initially projected, according to a recent note from Peter Galbo, an analyst at Bank of America Corp. Galbo said that consumers “develop more habitual routines when using plant-based dairy” as opposed to Beyond Meat’s products, which are consumed less frequently.
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