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Beyond Meat was a very popular short before the company’s inaugural earnings call on June 6. So popular, in fact, that data provider S3 estimated that half the free float of stock available for trading was sold short, more than a typical stock’s 12 times. Excessive short interest raises the risk of a short squeeze, when stock prices “melt up” as short sellers rush to buy stock to cover bearish bets.
That’s what happened. On the call, management set 2019 sales at $210 million, 2% higher than Wall Street was expecting. The...