Beyond Meat has been highly volatile after the explosive gains it posted in yesterday's trading.
Meme-stock traders have been shaping Beyond Meat's recent valuation moves.
Beyond Meat could see upward swings in the near term, but the business is facing long-term challenges.
Beyond Meat (NASDAQ: BYND) stock is heading lower in Tuesday's trading. The meat-alternatives company's share price was down 1% as of 2 p.m. ET. At the same point in the daily session, the S&P 500 and Nasdaq Composite were up 0.1% and 0.5%, respectively.
Following yesterday's massive rally, Beyond Meat stock is getting hit with selling action in today's trading. Despite currently being in the red, the company's share price had been up as much as 10.4% earlier in the session. It had also been down as much as 30.6%.
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Beyond Meat stock managed to post massive gains in Monday's trading despite the S&P 500 and the Nasdaq Composite ending the day solidly in the red. The company's share price rocketed roughly 36% higher yesterday, but there wasn't any business-specific news behind the rally.
Beyond Meat has emerged as a popular meme-stock trade over the last few months, and it saw big gains yesterday as investors poured back into the stock. The valuation trend is reversing somewhat today as investors move to take profits, but shares have bounced back from huge sell-offs earlier in the session.
Beyond Meat stock will likely continue to be highly volatile in the near term, and its share price will likely continue making big moves even in the absence of major company-related news. With the stock still down roughly 73% over the last year and retaining support from meme-stock traders, it's possible that shares could see more instances of explosive near-term rallies. On the other hand, the business is still facing some big fundamental challenges -- and the company faces significant bankruptcy risks unless its performance and financial footing improve.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Beyond Meat. The Motley Fool has a disclosure policy.