Following a Reddit post about how Wendy's is "literally the perfect stock," Wendy's Co. shares surged to an all-time high on Tuesday, making the fast-food company the first restaurant to get looped into the weird and wild world of "meme-stock" trading.
The subreddit "r/WallStreetBets" gained international attention in January when many of its members, which at that point, totaled about 4.6 million users, rallied against Wall Street's effort to drive Gamestop's share price down by short selling the stock.
As Salon's Jon Skolnik reported, "These online investors –– many of whom are retail investors using commission-free trading apps like Robinhood –– managed to catapult Gamestop's stock price by 1,500%, confounding market analysts and enraging institutional investors who bet on the company's downfall."
Since then, the subreddit has gained nearly 6 million new members and found new (often ironic) darlings along the way, including Blackberry, Bed Bath & Beyond and AMC. However, on Monday, Reddit user Chillznday laid out their reasoning for why Wendy's stock was an ideal investment.
They cited the popularity of the chain's seasonal strawberry chicken summer salad and Wendy's social media presence — which is, in itself, largely composed of memes and has included occasional Twitter jabs at Gamestop.
"Well this one is obvious but Wendy's Chicken Tendies," they wrote. "Literally the perfect stock for this sub." Tendies, by the way, is both r/WallStreetBets shorthand for trading profits (as one Redditor wrote, "LEVERAGE YOUR HOUSE!!!! LETS GET THESE TENDIES!!!!") and a reference to the chain's chicken nuggets.
In response, shares of Wendy's surged more than 25% in late afternoon trading Tuesday, and data from the Yolosocks.live website — which tracks real-time mentions on stocks within the subreddit chatroom — indicated that Wendy's became the seventh-most discussed stock among users, up from a previous rank of 19.
However, many financial analysts have pointed out that Wendy's stock is different from past "meme stocks" because, unlike Gamestop or AMC, it's not a popular choice among short sellers because it's currently experiencing steady growth and has been for the last five years. Additionally, Wendy's U.S. same-store sales in the first quarter increased by 13.5%.
And while many Redditors flocked to buy, some were still uncertain. As one user wrote, "I'm not investing in Wendy's until they can consistently remember my extra bbq sauce pack for my nugnugs."