What is the most efficient way to achieve an effect such as the one pictured below?
Create your text in Illustrator and convert it to paths. Next, use the direct selection tool to drag a selection box around just the points that make up the lower parts of the letters. Drag these points down until the text is as tall and stretched as you want it.
You may need to experiment and make some adjustments to get a pleasing result, but that’s the basic method.
Before you even start you should spend some time selecting an appropriate font. Look for letterforms that are easy to transform. Obviously sans-serif fonts will be simpler than serif ones.
Once you have your word typed out in Illustrator you need to convert it to paths by doing
Object > Expand > OK and then ungroup it Ctrl+Shift+G.
Then using the direct selection tool select a letterform to see the points to see which you need to remove and simplify to make stretching easier and more uniform.
My example is for the letter V. I removed 2 extra points that would have caused non-uniform stretching and I simplified the center to 1 point from 2.
You will need to experiment and adjust the letters to get the desired result, but this is a nice rundown of how to get started.