The stock of Beyond Meat (NASDAQ: BYND) has continued its upward trend during Friday’s pre-market hours. This follows an announcement by McDonald’s (NYSE: MCD) that they are testing a plant-based meat burger at some of its locations in Canada starting next week.
After closing Thursday’s trading session at $154.34, Beyond Meat surged by 11.58% early Friday.
The upward trend commenced on Thursday as the stock opened the day at $139.30 but closed the session nearly 11% higher. This coincided with an announcement by fast-food giant McDonald’s that it would be trying out a burger made with Beyond Meat’s plant-based patty at some of its outlets in Canada.
The burger branded P.L.T (plant, lettuce and tomato) will be tested out over a period of three months in southwestern Ontario. It will cost C$6.49 (approximately US$4.90) excluding tax.
The founder and CEO of the plant-based meat substitutes maker, Ethan Brown, hailed the development as having been a ‘central and defining goal’ since the inception of the firm.
As rivals such as Burger King introduced plant-based burger, McDonald’s had hesitated over fears that it wasn’t a sustainable consumer trend. The test will now allow McDonald’s to “learn more about real-world implications of serving the P.L.T., including customer demand and impact on restaurant operations.”
Having debuted on the market at the IPO price of $25, Beyond Meat has now appreciated by over 520%. Still, the stock has lost 35% from its record high of $239 registered in July.
Per Ihor Dusaniwsky, an analyst at S3 Partners, the stock has been a ‘major short sale target’ since the company went public. The analyst is now warning of an increased likelihood of a short squeeze happening:
…with mark-to-market losses mounting, stock borrow rates accelerating to the upside and stock recalls hitting the street the likelihood of a short squeeze is very high.
This article was edited by Samburaj Das.