Beyond Meat shares turned sharply on Wednesday, erasing a gain of up to 112% to close lower, marking a turbulent end for the company amidst the latest meme-stock craze.

The plant-based burger and sausage producer initially surged to $7.69, continuing a rally that had driven prices up over 1,300% since Thursday. However, it then plummeted more than 27% before recovering slightly to end down by 1%.

The loss snapped a sharp rally that started on Friday and accelerated on Monday, following a Business Insider report on trader Demitri Semenikhin promoting the stock on social media.

The momentum was possibly fueled by day traders aiming to squeeze short sellers, who had bet against the company by selling borrowed shares and needed to buy them back to close out their positions.

As of the end of September, approximately 64% of Beyond Meat’s tradable shares were sold short. On Monday night, Roundhill Investments added Beyond Meat to its Roundhill Meme Stock ETF, further highlighting the resurgence of meme-stock enthusiasm seen during the pandemic.

“The high level of market speculation and froth is evident,” commented Matt Maley, Chief Market Strategist at Miller Tabak + Co. LLC.

The stock saw another boost on Tuesday when Walmart Inc. announced it would expand the availability of Beyond Meat products to over 2,000 stores, according to a statement.

Despite this, Wall Street analysts remain skeptical about the company’s future. Beyond Meat currently holds six sell-equivalent recommendations, five holds, and no buy ratings.

Danni Hewson, head of financial analysis at AJ Bell, remarked, “An increase in distribution is positive if it leads to sales, but considering consumer sentiments towards meat alternatives, Beyond Meat faces significant challenges. The current activity seems driven more by a short squeeze than genuine investor interest in the stock.”

The popularity boost during the pandemic has waned, with the company struggling as consumers become put off by excessive processing, high costs, and taste concerns.

Wednesday’s session saw the stock oscillate between gains and losses, with trading halted over a dozen times due to extreme volatility. Option trading volume hit a record earlier in the day, according to Bloomberg.

Despite the recent swings, Beyond Meat shares are still higher than before last week, when the company announced that nearly all creditors had accepted a debt swap, potentially leading to substantial shareholder dilution.

Hewson concluded, “Beyond Meat could still turn things around, but it will require solid products that recapture initial interest by aligning with current eating trends and offering value for today's consumers.”