"Meme stock" frenzy reappears! Wendy's (WEN.US) surges 19% in pre-market trading, forcing the short squeeze situation to continue fermenting.

Before the pre-market trading on Thursday, Wendy's (WEN.US) rose by as much as 19%, but later the increase fell to 10%. Previously, due to Reddit forum users calling for retail investors to buy Wendy's stock, the stock rose by 25.7% on Wednesday, marking the largest increase since June 2021. Analysts warn that a short squeeze situation may be imminent. Vanda Research report stated that the current trend of Wendy's is highly similar to the short squeeze situation driven by retail investors in 2021. The report pointed out that the strongest retail buying activity in Wendy's history occurred on June 8, 2021, when retail investors, driven by social media such as Reddit, bought $37.4 million worth of shares. The stock rose by 25.85% that day. Vanda Research stated, "While each short squeeze situation driven by retail investors is not entirely the same, the core elements of this round of activity are very similar: high short interest, consumer stocks with a long history of weakening stock prices, high social media discussions, and the simple and understandable retail narrative of 'saving Wendy's'." "This is definitely another round of meme stock speculation," said Jim Salela, an analyst at Stephens Inc. "Wendy's is a classic American brand, and many retail traders may have fond memories of it, similar to the nostalgia people have for GameStop Corp. Class A (GME.US). In recent years, Reddit forum WallStreetBets has sparked waves of meme stock trends, with short-term traders constantly looking for the next target for collective buying. Last year, shares of donut maker Krispy Kreme (DNUT.US) and home renovation platform Opendoor Technologies (OPEN.US) soared due to retail investor buying. Mark Malek, Chief Investment Officer at Muriel Siebert & Co., stated that Wendy's is attracting attention possibly due to its low stock price and the pressure on consumer stocks from economic trends, leading to a lot of such stocks being shorted. According to data from S3 Partners, the short interest in Wendy's circulating shares is approximately 24%, which is a quite high level. If the stock price continues to rise and forces shorts to cover their positions, a short squeeze may occur. It is worth noting that the aggressive investor Nelson Peltz's Trian Fund Management is a long-term investor in Wendy's, holding over 14 million shares. Malek said, "The army of retail investors on Reddit has caught a group of nervous shorts. I will never short this meme stock frenzy, but I will also not change my view on the long-term prospects of the stock because of it." Wendy's is currently in a transformation phase, aiming to increase sales. On Tuesday, Wendy's appointed Steve Schuliess as the new Chief Financial Officer, replacing Ken Kuok, who will continue to serve as an advisor until July. Most Wall Street analysts are not optimistic about this move, with most giving Wendy's a "hold" rating and nearly a quarter of analysts recommending a "sell".