A plant-based “meat” maker’s shares tumbled as much as 22% to $2.80 in premarket trading Thursday in New York, the latest swing tied to retail-driven momentum and short sellers jockeying for position.
The drop, recorded around 4:30 a.m., follows a burst of meme-style activity that pulled the stock into sharp rallies and reversals. Traders described a tug-of-war between short covering and fresh bearish bets as attention shifted back to the name this week.
Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, said the trading reflected both pressure on bears and new wagers against the company. He pointed to brisk two-way flows as speculators repositioned in the early session.
Two-Way Short Activity Intensifies
“You’re getting two-way action on the short side — short covering for people that are getting squeezed, but more short selling for people that find this an attractive entry point,” said Ihor Dusaniwsky of S3 Partners LLC.
Short covering can force quick rallies when bearish traders buy shares to close positions. But when new
short selling enters at lower prices, it can cap rebounds and add to pressure on the way down. The clash often results in fast, wide price swings, especially in thin premarket hours.
In this case, activity resembled
past meme surges where retail interest spiked on social media, options volume jumped, and price action overshot fundamentals. The result is a volatile tape that can reverse direction within minutes.
Retail Momentum and Rapid Reversals
The stock has been swept up by the same dynamics that drove earlier retail frenzies. Traders chase quick gains, and attention shifts rapidly from one ticker to the next. As interest fades, liquidity thins and prices can retrace even faster than they rose.
Premarket moves are often magnified because fewer shares change hands. Market makers widen spreads, option market signals can skew, and algorithmic strategies respond to sudden order imbalances. These ingredients can amplify both squeezes and selloffs.
- Short covering lifts shares briefly as positions close.
- New shorts lean against rallies, increasing supply.
- Low-liquidity windows intensify each move.
Sector Headwinds Add Pressure
The
plant-based meat sector has struggled to sustain pandemic-era growth. Early enthusiasm led to
ambitious distribution deals and high expectations. Since then, consumer demand has cooled as shoppers weigh price, taste, and nutrition trade-offs.
Food inflation has pushed many households to trade down or switch to cheaper proteins. Restaurants have reduced menu complexity, trimming slower-moving items. Meanwhile, competition has expanded, putting pressure on pricing and promotions.
For investors, that backdrop raises concerns about margins, cash burn, and the pace of repeat purchases. When sentiment turns cautious, heavily shorted
stocks in challenged categories become targets for both speculative rallies and swift pullbacks.
What Traders Are Watching Next
Market participants are looking for near-term catalysts that could reset sentiment. Key events include earnings updates, guidance on cash needs, and any sign of stabilizing demand or
cost cuts. Borrow fees and share availability for shorts are also in focus, since tight supply can spark abrupt squeezes.
Volume trends will matter. Sustained, high-volume buying can absorb short supply and shift momentum, while fading interest could invite further pressure. Options activity, particularly near-dated calls, may continue to drive outsized intraday moves.
A Familiar Playbook With High Risks
The current episode follows a familiar pattern from earlier meme cycles: social buzz, rapid price spikes, and whipsaw reversals. The risk for retail traders is timing. Late entries during a squeeze face steep losses if the move stalls. Short sellers, meanwhile, risk sharp mark-to-market pain if a rally extends.
Analysts say the path forward depends on fundamentals catching up with price action. Clear progress on profitability, unit economics, and product repeat rates could steady the shares. Without that, trading is likely to remain event-driven and volatile.
The premarket plunge underscores how fragile momentum can be when sentiment outweighs fundamentals. Traders will watch for upcoming updates that might change the story. Until then, two-way flows and thin liquidity suggest more sharp swings ahead, with risks elevated on both sides of the trade.
