1 00:00:00,520 --> 00:00:02,160 Speaker 1: Already and this is the daily. 2 00:00:02,480 --> 00:00:05,640 Speaker 2: This is the daily, This is the daily. Ohs oh, 3 00:00:05,800 --> 00:00:06,840 Speaker 2: now it makes sense. 4 00:00:14,560 --> 00:00:16,960 Speaker 1: Good morning, and welcome to the Daily OS. It's Friday, 5 00:00:17,000 --> 00:00:19,360 Speaker 1: the twenty fourth of October. I'm Sam Kazlowski. 6 00:00:19,600 --> 00:00:20,560 Speaker 2: I'm Loseyer Tarsel. 7 00:00:20,960 --> 00:00:24,079 Speaker 1: Beyond Meat is one of the leading plant based meat 8 00:00:24,079 --> 00:00:27,320 Speaker 1: companies in the world, but it has had a rough 9 00:00:27,480 --> 00:00:30,360 Speaker 1: few years. Then all of a sudden, this week, it's 10 00:00:30,400 --> 00:00:34,280 Speaker 1: share price rocketed over one thousand percent in four days, 11 00:00:34,360 --> 00:00:37,960 Speaker 1: from fifty cents to nearly eight dollars. On today's podcast, 12 00:00:38,040 --> 00:00:41,080 Speaker 1: we're going to unpack what happened, the current state of 13 00:00:41,120 --> 00:00:45,480 Speaker 1: Beyond Meat and the world of meme stocks. 14 00:00:47,080 --> 00:00:50,159 Speaker 2: Before we get into all of that, Sam, can you 15 00:00:50,200 --> 00:00:52,840 Speaker 2: set the scene. What is Beyond Meat? 16 00:00:53,240 --> 00:00:56,520 Speaker 1: So they make plant based meat alternatives. So we're talking 17 00:00:56,520 --> 00:01:00,720 Speaker 1: about products like the Beyond Burger, Beyond Sausage. It's meat 18 00:01:00,760 --> 00:01:04,839 Speaker 1: made primarily from pea protein, and it's designs to taste 19 00:01:04,880 --> 00:01:07,440 Speaker 1: and feel like real meat. So it's different to say, 20 00:01:07,600 --> 00:01:10,679 Speaker 1: a veggie burger with a chickpea paddy. It's meant to 21 00:01:10,720 --> 00:01:13,959 Speaker 1: be like eating a steak. So founded in two thousand 22 00:01:14,000 --> 00:01:17,040 Speaker 1: and nine, they actually put their products in the meat 23 00:01:17,600 --> 00:01:21,120 Speaker 1: aisle of supermarkets instead of the freezer section with the 24 00:01:21,160 --> 00:01:23,759 Speaker 1: other vegetable products, and they were the first company really 25 00:01:23,800 --> 00:01:26,160 Speaker 1: to do that and have that kind of marketing approach 26 00:01:26,200 --> 00:01:28,840 Speaker 1: in the world. And when they IPO, so when they 27 00:01:28,880 --> 00:01:33,000 Speaker 1: listed on the US Stock Exchange in twenty nineteen, it 28 00:01:33,040 --> 00:01:37,520 Speaker 1: was a pretty legendary debut. So shares initially were priced 29 00:01:37,560 --> 00:01:40,399 Speaker 1: at twenty five dollars. By the end of the first day, 30 00:01:40,480 --> 00:01:44,679 Speaker 1: they were at sixty six dollars. By July one month later, 31 00:01:45,000 --> 00:01:47,880 Speaker 1: the stock hit two hundred and thirty five dollars and 32 00:01:47,920 --> 00:01:51,200 Speaker 1: that essentially meant that they were worth US fourteen billion 33 00:01:51,280 --> 00:01:55,760 Speaker 1: dollars despite making just three hundred million dollars in revenue 34 00:01:55,840 --> 00:01:59,240 Speaker 1: and never being profitable, in fact, being very far from profitable. 35 00:01:59,560 --> 00:02:01,800 Speaker 2: You mentioned and up at the top though, that their 36 00:02:01,840 --> 00:02:04,800 Speaker 2: share price has dropped down to around fifty cents. Ye, 37 00:02:04,960 --> 00:02:08,760 Speaker 2: that's a big fall from the high two hundred dollars 38 00:02:08,800 --> 00:02:10,120 Speaker 2: to the fifty cents. 39 00:02:10,200 --> 00:02:13,760 Speaker 1: What happened, well, in short, people stopped eating plant based 40 00:02:13,800 --> 00:02:17,840 Speaker 1: meat alternatives. The entire industry really collapsed, and they have 41 00:02:17,960 --> 00:02:20,720 Speaker 1: some really big deals that they've done, say with Hungry Jacks. 42 00:02:20,760 --> 00:02:23,160 Speaker 1: Here in Australia, you can have it Beyond Burger. They 43 00:02:23,160 --> 00:02:26,079 Speaker 1: had those big corporate partnerships, but in terms of people 44 00:02:26,120 --> 00:02:29,360 Speaker 1: shopping in the grocery stores, they stopped buying the product. 45 00:02:29,800 --> 00:02:32,440 Speaker 1: And it has kept going down since about twenty twenty one. 46 00:02:32,840 --> 00:02:35,880 Speaker 1: So just last year, US sales fell seven and a 47 00:02:35,919 --> 00:02:39,720 Speaker 1: half percent. The number of households buying these products dropped 48 00:02:39,760 --> 00:02:42,840 Speaker 1: from nineteen percent in twenty twenty two, so one in 49 00:02:42,960 --> 00:02:46,080 Speaker 1: five yea, to thirteen percent in twenty twenty four. And 50 00:02:46,080 --> 00:02:49,440 Speaker 1: the biggest problem really is price. So plant based meat 51 00:02:49,560 --> 00:02:53,720 Speaker 1: costs eighty percent more per kilo than regular meat, and 52 00:02:53,760 --> 00:02:56,000 Speaker 1: in the period towards the end of the pandemic and 53 00:02:56,040 --> 00:02:58,640 Speaker 1: the couple of years after that, inflation and cost of 54 00:02:58,639 --> 00:03:02,360 Speaker 1: living with the big touring points, people weren't willing to 55 00:03:02,440 --> 00:03:05,000 Speaker 1: pay almost double the price of real meat to have 56 00:03:05,120 --> 00:03:08,480 Speaker 1: replacement meat. And if they were vegetarian, they would pick 57 00:03:08,600 --> 00:03:12,720 Speaker 1: plant based alternatives like veggie paddies rather than products designed 58 00:03:12,720 --> 00:03:15,080 Speaker 1: to look and feel like meat. And so Beyond Meat's 59 00:03:15,120 --> 00:03:19,120 Speaker 1: revenue collapsed thirty percent from its twenty twenty one peak. Wow, 60 00:03:19,160 --> 00:03:21,359 Speaker 1: now to this day they've never made a profit. They're 61 00:03:21,400 --> 00:03:25,240 Speaker 1: still losing thirty million dollars every three months revenue is 62 00:03:25,280 --> 00:03:28,919 Speaker 1: going to fall another thirteen percent this current quarter. And 63 00:03:29,160 --> 00:03:33,320 Speaker 1: they've cut thirty percent of their workforce since twenty twenty two. 64 00:03:33,440 --> 00:03:36,800 Speaker 2: So the business is genuinely struggling, which makes the developments 65 00:03:36,840 --> 00:03:40,960 Speaker 2: of this week genuinely quite bizarre. Before we get into that, though, 66 00:03:41,040 --> 00:03:47,320 Speaker 2: a quick word from our sponsor, So Sam, this business 67 00:03:47,360 --> 00:03:50,600 Speaker 2: beyond Meat has been struggling so much it's had to 68 00:03:50,640 --> 00:03:53,880 Speaker 2: cut a chunk of its workforce. It's never made a profit. 69 00:03:54,320 --> 00:03:57,000 Speaker 2: Why did the stock shoot up so much this week? 70 00:03:57,360 --> 00:03:59,320 Speaker 1: So let's go back a week. It is trading at 71 00:03:59,360 --> 00:04:02,320 Speaker 1: fifty cent stock. So we talked before about the two 72 00:04:02,400 --> 00:04:05,320 Speaker 1: hundred and thirty five dollars high. Now it's fifty cents. 73 00:04:05,600 --> 00:04:09,480 Speaker 1: Six days later it hit nearly eight dollars. That's fourteen 74 00:04:09,600 --> 00:04:11,680 Speaker 1: hundred percent in four days. 75 00:04:12,000 --> 00:04:12,280 Speaker 2: Wow. 76 00:04:12,280 --> 00:04:14,600 Speaker 1: But when you go into a bit more of the 77 00:04:15,000 --> 00:04:17,520 Speaker 1: types of shares that were being traded, the behavior of 78 00:04:17,560 --> 00:04:21,600 Speaker 1: share traders, there's a few interesting trends here. So on Thursday, 79 00:04:21,640 --> 00:04:26,080 Speaker 1: October seventeenth, the stock jumped fifty percent in one day. Now, 80 00:04:26,120 --> 00:04:28,640 Speaker 1: on the normal day of trading on the stock market 81 00:04:28,640 --> 00:04:32,359 Speaker 1: for the company, about thirteen million shares change hands, go 82 00:04:32,440 --> 00:04:35,440 Speaker 1: from you to me, me to you, that day on Thursday, 83 00:04:35,520 --> 00:04:39,080 Speaker 1: four hundred and thirty eight million shares were moved around. Wow. 84 00:04:39,200 --> 00:04:41,719 Speaker 1: Then we get to Monday of this week, a big 85 00:04:41,760 --> 00:04:46,279 Speaker 1: financial company called Roundheel Investments. They added Beyond Meat to 86 00:04:46,360 --> 00:04:49,760 Speaker 1: their meme stock ETF. Now just quickly and ETF is 87 00:04:49,800 --> 00:04:52,919 Speaker 1: basically a basket of stocks that they compile. You and 88 00:04:52,960 --> 00:04:55,880 Speaker 1: I can buy shares in that basket by being included 89 00:04:55,920 --> 00:04:58,480 Speaker 1: in the basket. The stock went up another one hundred percent. 90 00:04:58,680 --> 00:05:00,799 Speaker 1: But then we get to Tuesday, and that was really 91 00:05:00,839 --> 00:05:04,400 Speaker 1: where things kicked off. Beyond Meat announced an expansion to 92 00:05:04,440 --> 00:05:07,320 Speaker 1: two thousand Walmart stores. The stock went up another one 93 00:05:07,360 --> 00:05:11,440 Speaker 1: hundred and fifty percent. Two billion shares changed hands, and 94 00:05:11,480 --> 00:05:15,039 Speaker 1: then on Wednesday, absolute chaos. The stock opened at six dollars, 95 00:05:15,120 --> 00:05:17,680 Speaker 1: it went up to seven dollars sixty nine, and it 96 00:05:17,839 --> 00:05:20,039 Speaker 1: ended the day at three dollars fifty. So if you 97 00:05:20,320 --> 00:05:23,720 Speaker 1: invested five thousand dollars at lunchtime, you had two five 98 00:05:23,800 --> 00:05:26,440 Speaker 1: hundred dollars by the end of the day. That's a 99 00:05:26,480 --> 00:05:30,800 Speaker 1: lot of movement for a small, relatively small stock. And 100 00:05:30,880 --> 00:05:32,920 Speaker 1: so the question started to come of why is this 101 00:05:32,960 --> 00:05:33,560 Speaker 1: all happening? 102 00:05:33,880 --> 00:05:36,200 Speaker 2: So you mentioned you explained what an ETF is, But 103 00:05:36,240 --> 00:05:39,039 Speaker 2: you didn't explain what a meme stock is. Can you 104 00:05:39,040 --> 00:05:40,040 Speaker 2: explain what that means? 105 00:05:40,160 --> 00:05:43,279 Speaker 1: So it's basically a stock that goes viral on social media. Yeah, 106 00:05:43,640 --> 00:05:46,760 Speaker 1: just like an Internet meme, except with real money at stake. 107 00:05:47,279 --> 00:05:49,640 Speaker 1: The price of a meme stock going up and down 108 00:05:49,680 --> 00:05:52,000 Speaker 1: has nothing to do with the performance of the company. 109 00:05:52,520 --> 00:05:56,520 Speaker 1: It's really driven by online hype and that's usually on Reddit. 110 00:05:57,000 --> 00:05:59,640 Speaker 1: So Game Stop in twenty twenty one is a classic 111 00:05:59,680 --> 00:06:04,280 Speaker 1: example a struggling video game retailer. People weren't buying games 112 00:06:04,279 --> 00:06:07,360 Speaker 1: in person at the shops anymore. It went from seventeen 113 00:06:07,400 --> 00:06:09,680 Speaker 1: dollars to four hundred and eighty three dollars in a 114 00:06:09,720 --> 00:06:12,680 Speaker 1: couple of weeks, and that was thanks to a coordinated 115 00:06:12,720 --> 00:06:15,599 Speaker 1: effort that all was born out of a Reddit forum 116 00:06:15,680 --> 00:06:19,400 Speaker 1: called Wall Street Bets. Now with Beyond Meat, reddit users 117 00:06:19,440 --> 00:06:22,920 Speaker 1: started to chat just last week about how stocks in 118 00:06:23,320 --> 00:06:26,920 Speaker 1: Beyond Meat were being shortered and began to joke about 119 00:06:26,920 --> 00:06:29,040 Speaker 1: how fun it would be to make the stock price 120 00:06:29,080 --> 00:06:32,120 Speaker 1: shoot up in value in what's called a short squeeze. Now, 121 00:06:32,200 --> 00:06:34,719 Speaker 1: one of the mean parts of this is the code 122 00:06:35,160 --> 00:06:40,040 Speaker 1: used for the company, it's Beyond BYND. So people were 123 00:06:40,080 --> 00:06:42,640 Speaker 1: joking that they could make the stock go to infinity 124 00:06:42,680 --> 00:06:43,400 Speaker 1: and beyond. 125 00:06:43,240 --> 00:06:45,960 Speaker 2: Oh like buzz light yet yeah exactly. But then you 126 00:06:46,120 --> 00:06:48,320 Speaker 2: touched on something called a short squeeze. Can you explain 127 00:06:48,360 --> 00:06:49,000 Speaker 2: what that means? 128 00:06:49,240 --> 00:06:51,560 Speaker 1: This is a tough one to explain, but I'll give 129 00:06:51,560 --> 00:06:54,159 Speaker 1: it a go. So, basically, when hedge funds, and a 130 00:06:54,160 --> 00:06:57,520 Speaker 1: hedge fund is a huge collection of other people's money 131 00:06:57,839 --> 00:07:00,840 Speaker 1: that they're entrusted to invest in right the right ways. 132 00:07:00,880 --> 00:07:03,800 Speaker 1: In the stock market, if a hedge fund thinks that 133 00:07:03,880 --> 00:07:06,680 Speaker 1: the company's about to fail, they can essentially bet on 134 00:07:06,720 --> 00:07:09,720 Speaker 1: the price of that stock to go down, not up. 135 00:07:10,080 --> 00:07:13,360 Speaker 1: And how that works is essentially you borrow shares in 136 00:07:13,400 --> 00:07:16,000 Speaker 1: that stock, you sell the borrowed shares, you try and 137 00:07:16,040 --> 00:07:17,960 Speaker 1: buy it back at a lower price, and you make 138 00:07:18,040 --> 00:07:20,480 Speaker 1: up the gap. We don't really need to fully understand 139 00:07:20,640 --> 00:07:23,600 Speaker 1: all of this. What you need to understand, though, is 140 00:07:23,640 --> 00:07:25,600 Speaker 1: that if it goes up, you lose a lot of money. 141 00:07:25,720 --> 00:07:26,520 Speaker 2: Yeah, yeah, yeah. 142 00:07:26,560 --> 00:07:30,080 Speaker 1: And so about sixty three percent of Beyond Meats shares 143 00:07:30,560 --> 00:07:33,440 Speaker 1: were being shortered. Wow, So sixty three percent of the 144 00:07:33,440 --> 00:07:37,080 Speaker 1: company's financial holdings were people who were betting on it 145 00:07:37,120 --> 00:07:40,120 Speaker 1: to go down. Most stocks have about two to five 146 00:07:40,200 --> 00:07:43,960 Speaker 1: percent of that category, and so hedge funds were basically 147 00:07:44,000 --> 00:07:46,880 Speaker 1: saying this company is headed for bankruptcy. 148 00:07:47,240 --> 00:07:51,040 Speaker 2: Wow. And so all of these online traders say, we're 149 00:07:51,040 --> 00:07:52,840 Speaker 2: going to make the share price go up as fast 150 00:07:52,880 --> 00:07:57,600 Speaker 2: as possible by buying stocks, increasing demand, essentially squeezing those 151 00:07:57,640 --> 00:07:58,960 Speaker 2: hedge funds exactly. 152 00:07:59,040 --> 00:08:01,760 Speaker 1: And because it's the int we can always track at 153 00:08:01,840 --> 00:08:04,920 Speaker 1: least one big turning point, and that would be when 154 00:08:05,000 --> 00:08:09,960 Speaker 1: a Dubai trader called Dimitri Semenikin bought three point one 155 00:08:10,160 --> 00:08:13,120 Speaker 1: million shares at seventy eight cents. Remember there was that 156 00:08:13,160 --> 00:08:16,240 Speaker 1: lower fifty cents, so he bought about four percent of 157 00:08:16,240 --> 00:08:19,640 Speaker 1: the company, essentially to be taking part in this viral meme. 158 00:08:20,200 --> 00:08:23,480 Speaker 1: He posted on YouTube in a video explaining why he 159 00:08:23,560 --> 00:08:27,120 Speaker 1: did that, which is exactly what the YouTube and Reddit 160 00:08:27,240 --> 00:08:30,400 Speaker 1: user roaring Kitty did for game Stop. You might remember 161 00:08:30,440 --> 00:08:33,240 Speaker 1: that from the movie about it called Dumb Money and 162 00:08:33,280 --> 00:08:36,280 Speaker 1: readit piled in, so beyond Meat became the number one 163 00:08:36,320 --> 00:08:40,040 Speaker 1: trending stock on Wall Street. Bets on Reddit posts about 164 00:08:40,080 --> 00:08:44,319 Speaker 1: the stock increased eighty four percent. Retail traders like people 165 00:08:44,440 --> 00:08:47,160 Speaker 1: on the forums, they bought thirty five million dollars on 166 00:08:47,240 --> 00:08:50,120 Speaker 1: that day alone. That was the biggest single day in 167 00:08:50,120 --> 00:08:53,760 Speaker 1: the company's history, and it really elevated the profile of 168 00:08:53,760 --> 00:08:57,840 Speaker 1: the stock, and it did go to infinity and beyond temporarily. 169 00:08:57,440 --> 00:09:00,440 Speaker 2: Well, and then it crashed back down again. Exactly what 170 00:09:00,600 --> 00:09:02,559 Speaker 2: is going to happen next Beyond Meat. 171 00:09:02,640 --> 00:09:05,040 Speaker 1: Well, I think the really confusing bit about the Beyond 172 00:09:05,040 --> 00:09:07,800 Speaker 1: Meat story this week and the whole nature of meme stocks, 173 00:09:07,840 --> 00:09:11,439 Speaker 1: is that the company's fundamentals haven't changed. And just because 174 00:09:11,440 --> 00:09:14,240 Speaker 1: the stock was momentarily worth a lot more and saw 175 00:09:14,280 --> 00:09:18,040 Speaker 1: this one thousand percent gain, it's still struggling to sell 176 00:09:18,120 --> 00:09:21,560 Speaker 1: products to consumers. And if we look back at history, 177 00:09:21,920 --> 00:09:25,120 Speaker 1: the other stocks that have been the subject of memes, 178 00:09:25,480 --> 00:09:28,960 Speaker 1: Game Stock, AMC, which is a cinema chain, bed Bath, 179 00:09:29,000 --> 00:09:32,400 Speaker 1: and Beyond, they can have these moments of strength because 180 00:09:32,400 --> 00:09:35,440 Speaker 1: of a meme rally, but it can still head back 181 00:09:35,480 --> 00:09:39,559 Speaker 1: down to worth pretty quickly. Even since Wednesday, the stock 182 00:09:39,600 --> 00:09:44,600 Speaker 1: prices come right down, and so analysts say that until 183 00:09:44,800 --> 00:09:48,440 Speaker 1: there's more demand for the actual product of replacement meat, 184 00:09:49,000 --> 00:09:51,600 Speaker 1: not even a meme rally can fix the hopes of 185 00:09:51,640 --> 00:09:52,240 Speaker 1: this company. 186 00:09:52,720 --> 00:09:55,120 Speaker 2: Well, we will be keeping tabs on it now. I'm 187 00:09:55,160 --> 00:09:56,520 Speaker 2: completely obsessed with this story. 188 00:09:56,679 --> 00:09:58,760 Speaker 1: It was a media one. It was a media one. 189 00:09:58,840 --> 00:10:01,880 Speaker 2: It was a fakely media one. Absolutely thanks so much 190 00:10:01,920 --> 00:10:04,400 Speaker 2: for explaining that, Sam, and thank you for joining us 191 00:10:04,440 --> 00:10:07,000 Speaker 2: today on the Daily OS. We'll be back this afternoon 192 00:10:07,000 --> 00:10:13,840 Speaker 2: with the headlines. Until then, have a fabulous Friday. My 193 00:10:13,960 --> 00:10:16,840 Speaker 2: name is Lily Maddon and I'm a proud Arunda Bungelung 194 00:10:16,960 --> 00:10:21,280 Speaker 2: Kalkadin woman from Gadigol Country. The Daily oz acknowledges that 195 00:10:21,360 --> 00:10:23,800 Speaker 2: this podcast is recorded on the lands of the Gadighl 196 00:10:23,840 --> 00:10:27,000 Speaker 2: people and pays respect to all Aboriginal and Torres s 197 00:10:27,040 --> 00:10:29,880 Speaker 2: right island and nations. We pay our respects to the 198 00:10:29,880 --> 00:10:32,679 Speaker 2: first peoples of these countries, both past and present.