r/stocks
Wendy's Vs Gamestop
The author argues Wendy's is safer than GameStop due to high short interest and a cash dividend, suggesting a potential short squeeze.
- Wendy's has a high short interest (26-38%) making a short squeeze possible.
- Wendy's is a legitimate turnaround play with a built-in cash dividend.
- The cash dividend slowly chokes out shorts while investors wait.
140% (+/-) Short Int vs. 35%(+/-) Short Int
Wendy's is a fundamentally safer investment.
(\imo, this is not financial advice\).
Why? the GameStop squeeze was significantly more violent for one specific reason... the math was broken.
At the peak, GameStop's short interest was over 140%. Hedge funds had literally shorted more shares than actually existed in the market. When the price started rising, it created an infinite feedback loop of forced buying because they all needed shares that didn't exist.
Wendy's short interest currently sits roughly between 26% and 38% of the float (depending on which financial tracker you look at). That is incredibly high for a fast-food brand, meaning a short squeeze is absolutely possible and likely
GameStop was a pure casino play driven by broken market mechanics. Wendy's is a legitimate turnaround play with a built-in cash dividend that slowly chokes out the shorts while you wait.
Do you agree with this? If not tell me why, i'm always down to hear others thoughts on the Wendy's Frenzy.