Reddit turned Wendy’s into the newest meme stock

Less than two weeks ahead of America’s 250th anniversary, the patriotic people of r/WallStreetBets rallied to restore a cherished US institution: Wendy’s. A Reddit post titled “We need to save Wendy’s” helped the fast-food chain’s stock surge as much as 41.9% yesterday before closing up 25.7% at $7.87.

Investing based on love for the Baconator is the latest example of the power of Reddit’s investing community, which turned GameStop and AMC into lucrative meme stocks in 2021. Now, retail investors have identified Wendy’s as the latest opportunity to squeeze short sellers and make a mint:

• Per data from MarketBeat, ~32% of Wendy’s stock (the value of which has fallen more than 70% since 2023) is being sold short, creating the possibility that a sudden spike in share price could force short sellers to buy more stock to cover their position and drive the price even higher.
• But some posters warned this could be a repeat of last year, when a squeeze was placed on Beyond Meat (now known as Beyond The Plant Protein Co.), and incorrect information led to losses for the squeezers.

Beyond the pure hype…some of the stock’s buyers cited confidence in Wendy’s hiring of CFO Steve Cirulis this week, a move that comes a month after Bob Wright was installed as the new CEO. Both come from the sandwich chain Potbelly, which had impressive growth during their more than five years there together.—DL