What Happened?
Shares of fast-food chain Wendy’s (NASDAQ: WEN) jumped 3.6% in the afternoon session after the company announced a marketing collaboration with Netflix and separately attracted interest from traders focusing on highly shorted stocks.
The fast-food chain revealed a partnership with the popular Netflix show "Wednesday," launching a limited-time "Meal of Misfortune" to coincide with the show's second season premiere. This collaboration, featuring themed menu items like the "Raven's Blood" Frosty, was designed to boost brand visibility and drive sales, particularly among a younger demographic. Separately, the stock also appeared to be caught up in a wave of buying targeting companies with significant short interest. Short interest on Wendy's was noted to be high for a restaurant stock at 11.1% of its total float, attracting attention from retail investors in a phenomenon reminiscent of "meme stock" rallies. The stock jumped as much as 12% in the premarket session before settling with a strong gain in morning trading.
After the initial pop the shares cooled down to $11.32, up 4.3% from previous close.
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What Is The Market Telling Us
Wendy’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago when the stock dropped 4.1% on the news that the major indices pulled back (Nasdaq -0.8%, S&P 500 -0.77%), largely due to escalating concerns surrounding the July 9th deadline for new US tariffs, now amplified by specific announcements. Earlier in the day, President Trump confirmed that Japan and South Korea would face new 25% tariffs on their imports to the US, effective August 1st. These announcements came ahead of the broader July 9th expiration of a 90-day pause on reciprocal tariffs, which failed to produce comprehensive trade deals with most nations. This action against two major trading partners, coupled with the ongoing threat of further tariffs on countries associated with the BRICS bloc, injected significant uncertainty and apprehension into global markets. Investors were likely reacting to the increased costs for businesses, potential disruptions to global supply chains, and the broader implications for international trade relations.
Wendy's is down 29.8% since the beginning of the year, and at $11.32 per share, it is trading 44.5% below its 52-week high of $20.40 from October 2024. Investors who bought $1,000 worth of Wendy’s shares 5 years ago would now be looking at an investment worth $489.40.
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