r/wallstreetbets
DD on Wendy, credit Derek quick, added my position as well
Bullish DD on WEN citing record volume, 33%+ short float for squeeze potential, 1994-level valuations from beef crisis, and activist investors Peltz & Watsa.
- Record weekly/monthly volume; retail +130%, institutional +95%, premarket institutional +1000% vs averages
- 33%+ short float creates significant short-squeeze potential as momentum builds
- 125% of float effectively locked up; two billionaire activists (Peltz, Watsa) involved — any 13D update is a major catalyst
- Stock down ~78% from 5-year highs, creating significant overhead supply and trapped sellers
- Institutions deployed $10M+ in puts to actively suppress the stock price
- Record beef prices and 75-year-low cattle inventory compressing margins industry-wide
Wendy's stock has had the highest weekly & monthly trading volume in its history.
Nobody cared about my Wendy's thesis before the moon,I believe this could turn into a multi month move. With more than 33% of the float sold short, I think a lot of shorts could be forced to cover if momentum continues.
Today's order flow continues to support that view. Retail volume was up roughly 130% versus its 30 day average during regular trading, professional volume was up 107%, institutional volume was up 95%, & premarket institutional activity surged more than 1,000% above normal, 13D holder? ;)
This isn't just one group buying, the institution & shorts also used puts today $10M + to hold it back, likely because shares are getting harder to find & WSB has been buying 0DTE options helping fuel the coming moon.
People think this is just a WSB meme P&D but it's not, this stock IMO should have never been trading at the current 1994 valuations that reflects a black swan event, the lowest U.S. cattle inventory in roughly 75 years & record beef prices where Wendys being never frozen U.S. Beef has seen the biggest reaction.
Those conditions have compressed margins across the industry. If that reverses over time, recently- cheaper oil prices, EO's on U.S. Beef, Imports etc, I believe today's valuation could prove to be a golden swan opportunity.
A lot of the resistance we've seen comes from investors who have been trapped during the stock's roughly 78% decline from its highs over the past five years. That kind of capitulation creates overhead supply, but eventually those sellers run out.
With approximately 125% of the float effectively locked up & two billionaire activist investors involved, any updated 13D or additional accumulation could become a major catalyst. If that happens, I think the setup exists for a much larger moon & spark a mini gi em ai event.
This record volume & option flow also gives activists like Nelson Peltz & Perm Watsa a recent buyer - Canadian Buffett, give them both a better opportunity to continue accumulating shares in an already tight float. Whether that ultimately leads to strategic changes, a larger stake, or a buyout remains to be seen, but I think the probability has increased. Peltz is interested & already took WEN private years ago.