Jim Cramer said Tuesday that retail investors on Reddit are “spreading their wings” pointing to discussions on r/WallStreetBets that make the case for fast-food chain $The Wendy's Co(WEN.US)$, CNBC reported.
What Happened
The television personality singled out a Reddit post by the user Chillznday that expounded why Wendy’s was the perfect stock for the WallStreetBets, or WSB, subreddit.
Chillznday mentioned a new summer salad, Wendy’s social media engagement involving memes, and "chicken tendies" as some of the factors that made the stock a perfect match for WSB.
The Reddit poster also touched on technical aspects of Wendy's stock and mentioned a low float of $17 million, of which 4-10% is short. As per Chillznday, the short will increase as it is a “relatively predictable stock.”
Wendy’s shares soared 25.85% in the regular session on Tuesday and rose another 4.78% in the after-hours trading to $30.25.
Why It Matters
Cramer noted the appreciation in Wendy’s stock was fueled by Chillznday and some other favorable anonymous posts.
“I want you to forget the analysts right now. The person in charge of Wendy’s is Reddit user Chillznda,” said Cramer, as per CNBC.
The analyst also pointed out that the WSB crowd was “spreading their wings, even into an institutional favorite like Wendy’s with a very low short position.”
The Wendy’s move, as per Cramer, is a departure from short squeezes that has been the focus of WSB which lead to stocks such as $GameStop Corp(GME.US)$, $BlackBerry Ltd(BB.US)$, and $AMC Entertainment Holdings Inc(AMC.US)$ soaring.
Cramer said that the methodology of valuing stocks by the new class of investors matters.
“If enough people with enough money start valuing stocks a different way, their new metrics matter, too, even if you think they’re absurd,” said the former hedge fund manager.
WSB investors are broadening their horizons, another stock that has emerged as a new darling of the Reddit investors this week is $CLOVER HEALTH INVESTMENTS CORP(CLOV.US)$.
Comment(15)
His timing feels Off to me. Why all of a sudden is he On board with WSB crowd? Feels like a classic honey pot situation and I think I’ll just stay with GME & AMC
Cramer is Chillznda. Chillznda is Cramer
Art of deflection I stay with amc and gme
Shillrat Cramer
Maybe a plot to manipulate people into selling their GME, AMC and BB to get into Wendy’s.
Meanwhile HF would have successfully shorted these shares and profit from their position in Wendy’s.
Double profit.
citadel owns a huge stake in clove. What i see is pump up and sell. They are just trying to make WSB sound like they are just swinging around different stocks.
If Clove crash then they will just say it's a pump and dump by WSB, where probably citadel is the biggest beneficiary.
Speading misdirection and FUD.
with wall street bets logic, yeah solid choice
Shillrat Cramer
Dont let another opinion get in to your Head , let’s focus on AMC Moasss 🦍🦍
this is the way 💯
Good one!!!
Cramer, pfft.
I agree. I just wish more people would stand their ground where the real war is and stop getting distracted by FUD and flocking to wherever the media directs them.
because wsb was taken over by shills months ago. r/superstore is the way.
I never like Cramer. Every time he speaks, my STOCKS goes down. BS.
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