Fast-food chain Wendy’s is the latest stock to reach meme status on the WallStreetBets Reddit forum. WEN, however, is different from meme stocks that have gone before it, as it is not exactly a short squeeze in the making. Investors are entering the stock with a vengeance anyway in hopes of scoring outsized profits.
Wendy’s market cap has expanded by nearly 20% today, making it one of the best-performing meme stocks of the bunch. It is also making it look easy for retail investors looking to jump on the meme stock bandwagon as hedge fund traders think twice about shorting stocks in the market.
Wendy’s may be a surprising choice for some investors, considering that the fast-food sector hasn’t exactly been in the danger zone. If anything, drive-thru restaurants were popular during the pandemic, as they offered consumers a convenient and safe option for dining. That demand is expected to persist.
And unlike veteran meme stocks GameStop and AMC Entertainment, which have short interest close to 20%, short interest in Wendy’s reportedly sits under 5%. Trading volume in WEN is robust, with nearly 60 million shares changing hands. Average volume in Wendy’s stock is 3 million.
Most meme stocks were first been dragged through the mud by short-sellers and have been rallying based on internet sentiment rather than any fundamentals. Wendy’s bucks this trend somewhat because it could be trading higher in its own right, even without the wind of the WallStreetBets’ crowd at its back. Its new summer salad notwithstanding, Wendy’s in its Q1 earnings report highlighted the following developments:
- bolstering its breakfast daypart
- making a digital push, which plays into consumers’ mobile habits
- growing its footprint around the world, including making its debut in the U.K.
Wendy’s fits the bill as a meme stock if only for its social media prowess. The company has a knack for engaging with its followers and poking fun at its competitors including Burger King, like this classic from 2019.
Wendy’s is a newcomer on the WallStreetBets bandwagon, though the forum has mentioned the company before. Whether or not it has a place in meme stock history remains to be seen. But it is not a stretch to expect that the stock could continue to rise not just for its ‘old-fashioned’ hamburgers but also for its ‘old fashioned’ bottom line.