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The latest stars of the meme-stock trade have lost steam.
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Beyond Meat was losing momentum already, while Opendoor saw fresh volatility after earnings.
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The hype has fizzled after a brief burst of enthusiasm, egged on by bullish retail investors.
The latest stars of the meme-stock trade fizzled this week.
Shares of Beyond Meat and Opendoor Technologies whipsawed in recent days, and while both stocks clawed back some losses to end the week, they’re down sharply from their recent highs.
Opendoor Technologies, which caught fire this summer after hedge fund manager Eric Jackson shared his bullish thesis on the ibuying company, plummeted 12% in five days. A lackluster earnings report and cautious guidance from management discouraged bullish retail traders on Thursday and into Friday’s session.
Meanwhile, Beyond Meat has been losing momentum since its October surge.
Opendoor ended this week at $6.56, down 40% from its most recent high. Beyond Meat has fared worse. Despite being up 16% on Friday to close at $1.39, the stock is down 82% from its October high of $7.69.
The two companies became meme stocks for similar reasons. Both benefited from an investor with deep pockets announcing a big bet and sharing a bullish thesis. In the case of Beyond Meat, a retail trader named Dimitri Semenikhin posted an analysis on its growth potential on Reddit.
Beyond Meat stock rallied almost 1,300% in just four days, but the momentum was unsustainable. Over the past month, shares have fallen more than 39% and is down 63% year-to-date.
Both meme stock declines can be partially attributed to negative announcements. Beyond Meat opted to delay its Q3 earnings report, citing the need to recalculate an impairment charge.
Opendoor reported earnings on time, but lackluster results and a cautious tone from management failed to reignite bullish sentiment.
While its $882 million revenue forecast topped Wall Street expectations, it hasn’t come in that low since Q3 2023. Opendoor also revealed a $0.12 loss per share, higher than the forecasted $0.7.
And while executives on the call touted trendy ideas like the tokenization of real estate assets, there wasn’t much in the way of positive catalysts to keep the rally going.
Jackson told Business Insider recently that he is optimistic that housing market conditions will shift in Opendoor’s favor in the coming year, but some economists have also said that a housing market revival isn’t likely in the near future, with affordability still constrained.
Meanwhile, Beyond Meat’s future remains uncertain as the company prepares to report earnings on November 11 and allow shareholders to vote on key measures that could impact share prices.
Read the original article on Business Insider