Messaging Around Wendy’s Meme Stock
Alan Greenspan might have called this week’s build up of Wendy’s stock irrational exuberance. The situation illustrates persuasive communication principles and company response.
Taking a page from the “OG” GameStop meme stock, Redditters on WallStreetBets promoted the narrative “Save Wendy’s” and taunted investors with “YOLO” and by showing a $350,000 position in WEN. The rhetoric tempts watchers with a “rescue narrative” and with Robert Cialdini’s influence principles of social proof and scarcity:
“We need to save Wendy's before it's too late!”
“$WEN to the moon – 350K YOLO.”
“Not if, but WEN!”)
“To the moon” also exemplifies insider language and inspires feelings of belonging.
The push worked, temporarily, lifting Wendy’s stock 42% until trading was halted. It closed at 25.7%, but as Vanda research company said, “[O]ur data confirms that today’s surge in WEN has indeed been driven by abnormal retail buying.” Redditers might dispute the “abnormal” characterization.
Wendy’s communicated little during the day except to announce a new CFO. What is there to say when your company becomes a meme stock? Probably nothing.