Shares of meal-kit company Blue Apron Inc., the meal delivery service, jumped on Tuesday, after the company said it would start adding Beyond Meat Inc.’s plant-based proteins to its menus beginning in August, sparking a round of short covering that drove the stock off its lows.
The stock APRN, +56.92% soared 33% on the news, while Beyond Meat BYND, +2.54% which has raced nearly 600% higher, taking its market cap above $10 billion since going public in May, rose another 3%. The plant-based meat company is now larger than 80 S&P 500 companies, including Macy’s, Xerox and Mylan.
Blue Apron stock has shown quite a bit of potential according to Newsheater which says, “In the 100 days of trading, APRN managed to top a 12.53% Moving average. Additionally, Blue Apron Holdings, Inc. shares have achieved a 52-week range between 6.10 and 58.35 alongside 100 days raw stochastic set at 42.16%.”
While short selling interest in Blue Apron has increased 117% in 2019, according to financial analytics firm S3 Partners, as the stock has dropped precipitously, in July, the number of shares shorted fell by 132,000 as traders covered some of those positions when the stock rose 13% following its reverse split.
Overall, short sellers are positive to the tune of $7.2 million in mark-to-market gains in 2019, however, the July rally cost them $1.7 million in losses, said S3 managing director of predictive analytics, Ihor Dusaniwsky. Today’s move will result in another $3.99 million in mark-to-market losses, wiping out about half of the year-to-date gains.
“Since we saw short covering during July’s rally, we should see additional short covering due to this spike in Blue Apron’s stock price as shorts rush to salvage and realize some of their year-to-date profits,” he said. “Beyond Meat short sellers have been bloodied by its over 100% post IPO returns, and now Beyond Meat is doing the same to Blue Apron short sellers.”
Joining forces with Beyond Meat offers Blue Apron exposure to a company and product that is proving surprisingly popular with consumers, as well as investors.
“We know a growing number of customers are interested in plant-based proteins, whether as an alternative to meat, a desire to explore a new ingredient, or an opportunity to make more sustainable food choices,” Blue Apron Chief Executive Linda Kozlowski said in a statement.
Investors looking for ETFs that contain Blue Apron can consider the iShares Core S&P Total U.S. Stock Market ETF (ITOT) or the Vanguard Extended Market ETF (VXF), while Beyond Meat fans can look at the Renaissance IPO ETF (IPO).
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