Beyond Meat: One Heavily Shorted Stock

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Fake meat firm Beyond Meat, Inc. (BYND) is one of the most heavily shorted stock at discount brokerages according to a note in The Wall Street Journal yesterday. In addition to the fake meat sector, the cannabis sector is also most shorted by market participants. NASDAQ listed Tilray Inc(TLRY) is one example in the Cannabis space.

The following chart shows the BYND stock price since its IPO:

Click to Enlarge

Source: Yahoo Finance

After reaching over $234 in July this year, the stock has plunged more than 50% and reached a low of about $98 yesterday. The hype over this new “revolutionary”industry seems to be wearing off. It won’t be a surprise if the stocks goes all the way to low double digits.

For investors looking at shorting, one other possible candidate is Wayfair Inc(W), the online furniture retailer.

Caution: Shorting stocks is not suitable for most retail investors as the potential for losses can be infinite, at least technically. 

Disclosure: No Positions

Global Bear Markets Since 1900: Chart

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Bear markets that occur globally have become frequent since 1912. Before that, for a long period of 64 years  from 1848 thru 1912 there were no global bear markets and the entire stretch of 64 years was of peace and economic growth. However all that changes when World War I started in 1914.

The following table shows the various bear markets at a global level since 1900:

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Source: Wars and Financial Panics: Global Bear Markets in the Twentieth Century, Investment Office

An excerpt from the above piece:

War hit the world in 1914 when World War I began.  Four bear markets occurred between 1912 and 1949. With the world generally at peace after World War II, recessions, sometimes driven by financial panics, were the main cause of bear markets.  This certainly was the case of the two bear markets that have occurred in the twenty-first century. Over time, bear markets have become more frequent, more integrated, but shorter in duration.  Information on the global bear markets since 1900 is provided in Table 1 using data from the GFD World Index.

On the Sector Breakdown of S&P 500 Index

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The S&P 500 is the benchmark index of the US equity market. Billions of dollars are invested in derivative products of this index as it is considered as the barometer of health of the US economy. The number of constituents in the index is actually 505 due to different share classes of some companies.

The biggest sector in the S&P 500 is IT at around 22% at the end of Sept 2019. The healthcare and financials are the next largest sectors with 13% each. The following chart shows the sector breakdown the S&P 500:

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Source: S&P 500

The performance of S&P 500 since mid-2009:

Download:  S&P 500 Factsheet (in pdf)

Related ETF:

  • SPDR S&P 500 ETF (SPY)

Disclosure: No Positions