Wendy’s shares surged as retail traders piled into the stock, reviving concerns that heavy short interest could fuel another meme-stock style rally, according to a report by the WSJ.
The fast-food chain’s stock jumped sharply after a wave of online enthusiasm pushed investors to buy the shares, with the move drawing comparisons to past short squeezes involving heavily shorted companies. The stock climbed 26% on Wednesday before swinging sharply the following day.
The rally appeared to be driven more by trading momentum than changes to Wendy’s business outlook. Retail investors, including traders active on social media forums, targeted the stock as short sellers faced potential losses and pressure to cover positions.
Wendy’s has attracted bearish bets after a prolonged decline in its share price, increasing the risk that forced buying by short sellers could accelerate gains if the rally continues.
The move highlights that retail traders remain willing to chase heavily shorted stocks, echoing the speculative waves seen during the 2021 meme-stock era.
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