Beyond Meat shares rose as much as 31% in morning trading after forming a joint venture with PepsiCo. According to CNBC, the joint venture will create, produce, and market snacks and drinks with plant-based substitutes.
- The gains by Beyond Meat may have been fueled by hedge funds rushing to cover their bets against the stock, a trend gaining popularity in heavily-shorted names this year.
- More than 38% of Beyond Meat shares available for trading are sold short.
- The partnership gives Beyond Meat a chance to leverage on PepsiCo’s production and marketing expertise for new products
- Pepsi will deepen its investment in plant-based categories, which are growing increasingly crowded while working with one of the top creators of meat substitutes.
- The partnership also helps Pepsi work toward its sustainability goals.
- Operations of the joint venture will be managed through a limited liability corporation called The PLANeT Partnership.
- JPMorgan analyst Ken Goldman views the partnership as an “incremental positive” for Beyond Meat, but feels the stock move has overshot the actual opportunity.
Beyond Meat and PepsiCo stocks are currently gaining. BYND: NASDAQ is up 17.85%, PEP: NASDAQ is up 0.77%
