Shares in Wendy’s stock soared more than 25% Tuesday, hitting an all-time high, thanks entirely to Reddit.
The Dublin, Ohio-based burger chain became a “meme stock” similar to companies like the gaming retailer GameStop and the movie theater chain AMC.
Meme stocks are subject to excessive trading by retail investors who peruse Internet forums or social media, notably the Reddit forum r/wallstreetbets, whose followers have pushed various stocks—like Tesla, for instance—to stratospheric highs.
Earlier this year, these retail investors took on hedge funds and other big investors who “short” stocks, or bet that they will decline, by pouring their money into certain shares. That sent GameStop shares soaring from less than $20 a share to more than $300 in a matter of weeks in January—even though the company has been losing millions while closing locations and facing a future in which consumers get their games over the Internet.
AMC, similarly, soared from the low single digits in January to $20 a share within days. It maintained a $10 a share level until last week when it started communicating directly with retail investors—going so far as to offer those investors free popcorn. The value of the company’s shares more than tripled as a result.
Wendy's issued no real news to generate such interest, though it did announce a new Summer Strawberry Chicken Salad on Monday.
Instead, Reddit users have been pushing the stock, along with other stocks like the health care company Clover Health. The meme stock tracking site Yolostocks ranked Wendy’s sixth among top tickers on the forum, up from a previous rank of 22.
One user called Wendy’s “the perfect stock” for the forum, noting its salad, chicken tenders and its social media presence, which is “no stranger to memes” and has interacted with GameStop.
Wendy's stock was up as much as 30% in pre-market trading on Tuesday and opened 14% higher. It closed the day up nearly 26% to $28.86 per share.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.