New meme stock Wendy’s soars more than 40% at one point with trading briefly halted

Wendy’s Stock Surges as Retail Investors Drive Enthusiasm

A Wendy’s restaurant in Austin, Texas, became the center of attention as shares of the fast-food chain surged on Wednesday. The sudden increase in stock price was fueled by a burst of retail investor enthusiasm, which seemed to be disconnected from the company’s recent executive appointment.

The stock climbed more than 42% on heavy volume following the announcement of Steven Cirulis, a former Potbelly executive, as Wendy’s new chief financial officer and chief strategy officer. While executive changes can impact investor sentiment, the significant jump in stock price indicated that other factors were driving the surge.

Trading was temporarily halted by the New York Stock Exchange due to volatility shortly after the market opened. Once trading resumed, Wendy’s stock reached a high of $8.89 per share, ultimately closing up 27%.

Retail traders have increasingly turned their focus to Wendy’s after the stock experienced a significant decline in value over the past year. The fast-food chain was the second-most mentioned stock on Reddit trading forums in the past 24 hours, according to data from Swaggy Stocks.

Social media posts have positioned Wendy’s as a potential turnaround and recovery play. A post on WallStreetBets titled “We need to save Wendy’s” gained traction, with users expressing support for the beleaguered brand. This surge in online attention mirrors previous meme-stock phenomena, such as the GameStop frenzy, where retail traders rallied behind struggling companies with high levels of short interest.

Wendy’s currently has around 23% of its free float sold short, making it a prime candidate for a short squeeze if rising prices force bearish investors to cover their positions, according to data from S3 Partners.

In conclusion, the surge in Wendy’s stock price highlights the power of retail investors in driving market momentum. As the fast-food chain continues to attract attention from online communities, its stock performance will be closely watched by both investors and industry analysts.

— CNBC’s Nick Wells contributed reporting.