Fast-Food Chain Wendy's Might Be New Meme Stock

Earlier in the month, shares of popular fast-food chain, Wendy's (WEN) surged more than 25% in a day's trading after investing communities on Reddit started circulating bullish comments about the fast-food chain, talking up the company's irreverent social media feed and its "chicken tendies" that make it "literally the perfect stock for this sub."

Unlike previous meme stocks AMC and GameStop, Wendy is not a company that many short-selling hedge funds are betting against.

The company's entire top shareholder is hedge fund Trian, run by Nelson Peltz. Trian holds about a 12% stake in Wendy's while Petlz personally owns another 7% of the firm. Top mutual fund companies Vanguard and BlackRock each have more than 7% stakes, too.

Still, that could be a recipe for a big stock surge like before. One investor on Reddit noted earlier this week that the fact that the stock is so widely owned by insiders and big institutional firms could make it ripe for a pop.

"Frenzy+scarcity+low volume means minimal buys could push the price quickly," the Reddit user wrote.

Other Reddit users noted that Wendy's social media team has a knack for dunking on competitors like McDonald's on Twitter. That irreverence could help gain the company new investors as well.

Wendy's relishes in the social media notoriety, describing its Twitter feed like this: "We like our tweets the same way we like to make our hamburgers: better than anyone expects from a fast food joint."

Some Reddit users also were quick to point out the delicious irony of the fact that Wendy's investors were generating big "tendies" — a term that is both Wall Street Bets code for trading profits as well as a nickname for Wendy's chicken nuggets.

The surge aside, here is how the company's stock performed.

Over the past five trading days, Wendy's stock declines 18% over a five-day trading period which ended on the 14th of June. compared to the broader market 

A decline of 18% or above in five trading days is an extremely rare event, calling for concern. This has happened only 7 times out of 2517 in the last ten years.

Throughout the year, the company's stock has consistently traded in the range of $20-23, until the 8th of June where it reached a peak of $28.87. While the stock has seen a decline of 2.76% in the past 5 days, and a decline of 0.09% in the last month, it has also recorded a year-to-date growth of 8.65% and a 3.75% growth in the past 6 months.

The company's stock (NASDAQ: WEN) currently trades at $23.23.