Beyond Meat Stock Rises Due to PepsiCo Partnership. What else could be behind the move.

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Beyond Meat

Stock surged Tuesday, after the alternative meat maker said it signed a partnership with

PepsiCo

– although there could be more to the move.

Beyond Meat (ticker: BYND) and PepsiCo (PEP) have announced a new joint venture, The PLANeT Partnership, in which the food manufacturers will “develop, manufacture and market innovative snack and beverage products made from plant protein.” The two companies hope to leverage Beyond Meat’s counterfeit meat technology with Pepsi’s marketing and distribution infrastructure. Financial terms have not been disclosed.

Beyond Meat Shares are Up 25% in Recent Trading to $ 198.33; Pepsi was up 0.4% at $ 140.76.

Beyond Meat shares are known for making big news about partnerships with established food brands. Earlier this year, shares were up 14% on Beyond’s deal with Yum! Brands’ (YUM) Taco Bell. At the end of 2020, the stock rose nearly 10% after the company said it would expand its distribution by

Walmart

(WMT). Similarly, the shares swooned 20% after

McDonald’s

(MCD) announced its McPlant initiative because, in line with previous practices, the company did not confirm that it was using Beyond Meat’s products.

However, there could be more to it than just excitement about the Pepsi news. With just over 38% of its stock selling short – meaning positions that bet the stock will fall – Beyond Meat stock could be swept up in the recent frenzy of speculative trading that has engulfed popular bearish trades. In other words, investors could be racing to reverse their bets that Beyond stock will fall, also known as a short squeeze.

GameStop

(GME) is the recent poster child for this. Shares, which have risen again by 17% on recent scrutiny, are up 332% since the beginning of the year. This short squeeze has allowed bears to get creative, but it has also spilled over to other stocks with high short interest rates.

Bed Bath & Beyond

(BBBY) shares is another example. It was hit with two downgrades today as analysts are unwilling to continue to hike their target prices after stocks are up more than 70% in just over three weeks.

With an increase of more than 60% year-to-date, today’s jump and high short-term interest rates, Beyond Meat looks like an excellent candidate to include in this group – even if the deal with Pepsi ultimately adds to the company.

Write to Teresa Rivas at [email protected]