Yahoo Finance’s Julie Hyman and Brian Sozzi discuss short-selling data on Beyond Meat stock after the company announced a partnership with KFC to produce plant-based chicken.

Video Transcript

JULIE HYMAN: Well, last week, we learned that Beyond Meat was rolling out a new meatless nugget product at KFC. The stock, though, has not done-- it's up today, but we have seen a downdraft over the past year or so, Brian Sozzi. And you're looking at some of the dynamics under the surface.

BRIAN SOZZI: Yeah, some interesting new short selling data out, Julie, this morning from S3 Partners and the Financial Times, pointing to a 40% increase in the short position in Beyond Meat since October when they reported their last quarter here. The overall short position in Beyond Meat is now 42%. As you can see on that chart right there, Beyond Meat is the most shorted stock inside the Russell 1000. And overall, shares of Beyond Meat are down about 44% over the past year, in large part because of just pressure on the restaurant side of the business, pressure in terms of production.

And so far, short sellers have been winning out. And really, it's because of this short position. I would argue, Julie, Beyond Meat hasn't gotten, I would say, the respect in the market for several product introductions like those new nuggets at KFC. Now we talked to Beyond Meat founder and CEO Ethan Brown earlier this week, asked him about the product pipeline. To me, it sounded like they have a lot of stuff in the hopper.

ETHAN BROWN: It's fun to look into our innovation pipeline and see all the products that are available for us to push out into the market. And if you look at what we were able to accomplish over the last 18 months, I think we've commercialized more products than anyone in the plant-based industry across the globe. We've opened up facilities in Europe and in China, introduced new products there, here in the US.

This is a perfect example. This is the largest nationwide plant-based chicken launch ever. And so we are innovating at a terrific pace. We're growing our infrastructure to be able to produce and serve these customers at an even stronger pace. And so we feel really good about what's coming down the pike. I think you'll see additional announcements from us throughout the year on products and partnerships.

BRIAN SOZZI: So you have to think, what will scare these short sellers out of Beyond Meat? One is just, I think, a continued barrage of new products that is likely coming over the next 12 to 18 months. And then secondarily, the fundamentals of the business just have to improve-- in large part, that restaurant side of the business. It is going to be tough because of what's going on with the pandemic. But they have to-- I think the market wants to see improvement in the restaurant side of the business for Beyond Meat and some traffic to return to a lot of the retail stores where their products are sold.

JULIE HYMAN: We'll see if that does end up coming to fruition or if the shorts will be sort of vindicated on this front.