Shares of The Wendy’s Company (NASDAQ:WEN) were rocketing 18% higher today after the WallStreetBets subreddit crowd apparently turned its attention to the fast-food chain and mentioned it as a possible short squeeze candidate.
Chat room traders this year have driven up the shares of a number of companies that short-sellers have bet heavily against. While squeezes are not uncommon, retail investors have driven the discussion since January when they rallied together to support GameStop (NYSE:GME) and lash out at hedge funds that overplayed their hands.
Wendy’s, though, is an unlikely stock to serve as a rallying point for Reddit investors, as there were just 8.2 million shares sold short at last count, down almost 18% from the prior period and amounting to just 4% of the shares outstanding.
With days to cover standing at around 2.5, it doesn’t seem like a strong candidate to carry the banner next.
Wendy’s stock is actually up 43% from the 52-week low it hit in March, and last month beat analyst expectations for first-quarter results, posting revenue of $460 million and generating adjusted profits of $0.20 per share.
That was notably better than the $444 million in revenue and $0.14 per share in earnings Wall Street anticipated.
While the meme stocks of the trading frenzy that started 2021 continue to capture the Reddit crowd’s fancy, such as AMC Entertainment Holdings (NYSE:AMC), which has doubled in the past week alone, there have been a few other stocks that were curious choices, such as Tootsie Roll Industries (NYSE:TR), whose stock spiked over 100% in January and still trades 15% above where it started the year.
Wendy’s has several tailwinds, including a returning workforce and a bullish outlook by management that raised full-year guidance.
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