(Reuters) - Beyond Meat shares soared 60% to a six-month high on Wednesday after the plant-based meat maker placed its bets on price hikes and steep cost cuts to turn around its battered margins, triggering a squeeze on its highly shorted shares.

About 37.6% of the company's free float, or shares worth $172.6 million, were shorted as of Monday, according to data and analytics firm Ortex. Bearish investors have lost $93 million on paper since Tuesday's close.

Beyond Meat was also the most shorted U.S. stock after COVID-19 vaccine maker Novavax, as per a report from S&P Global Market Intelligence this week.

The company, which supplies to McDonald's and Yum Brands, has lost nearly 70% of its market value since its much-hyped IPO in 2019 as sentiment around plant-based meat took a beating due to higher prices amid sticky inflation.

Beyond Meat reported a 7.8% decline in fourth quarter net revenue to $73.7 million, but that was better than the $66.7 million analysts had expected.

The company also laid out plans to "steeply reduce" operating costs to nurse back its margins bruised by price cuts to make faux meat more appealing to budget-conscious U.S. consumers.

It expects 2024 gross margins to be in the mid- to high-teens percentage range, compared to negative 24.1% in 2023.

"The shift to raising prices instead of cutting makes sense because Beyond probably needs to target a smaller set of consumers to succeed," TD Cowen analysts said in a note.

The stock was last trading at $12, in its best one-day percentage surge, if gains hold. But that compared with its 12-month high of $19.25 in July.

When short sellers rush to exit bearish bets due to a surge in a stock's price, it pushes shares even higher in what is called a short squeeze.

"We expect short sellers to add to the buy pressure, and therefore causing a short squeeze," Ortex co-founder Peter Hillerberg said.

(Reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)