If you’ve been on r/WallStreetBets in the past 6 years, you’re familiar with the Wendy’s jokes. Place a bad bet on the market and you’re suddenly “working at Wendy’s”. 

Well after the internet trolls squeezed Wendy’s this week I’m wondering if we’re entering another meme stock window.

Wendy’s Co (NASDAQ: WEN) had been a slow-motion disaster, down about 66% over five years. Somebody on reddit posted the chart of their beloved Wendy’s with a simple pitch.

“We need to save Wendy’s before it’s too late. If this company goes bankrupt, we’ll all be out of a job!”

Then one comment changed everything.

Someone else on the thread pointed out that about a third of Wendy’s shares were sold short. Roughly 1 in 3 (34% short float), way above what you’d see on a normal name. That comment shot to the top.

And the stock took off. The next morning it gapped open already up about 25% from Tuesday’s close, before a single trade, and pushed more than 42% higher before lunch.

Whenever a meme stock goes viral like this, it creates a perfect environment for additional short squeezes. 

The Meme Stock Playbook

Here’s how it usually goes with these meme stocks.

The crowd runs the shorts on a name like Wendy’s, gets a taste, and the wins pull more people in. The momentum builds, and that same crowd goes hunting for the next one.

They organize out in the open, on Reddit and the forums, and they pick their next target on purpose. The hunt is deliberate, and it’s coordinated.

So they go looking for the same fingerprint. A beaten-down company everyone recognizes, with a fat pile of shares sold short, sitting there waiting to get run.

We’ve watched this exact thing play out before.

Back in January 2021, GameStop had about 140% of its float sold short. The crowd piled in, the shorts got run over, and it went from under $20 to over $480 in a few weeks.

But GameStop didn’t run by itself. AMC, BlackBerry, Nokia, and Bed Bath & Beyond all caught fire in the same stretch. Once the crowd had its blood up, it went down the list and lit one beaten-down, heavily-shorted name after another.

That’s how a meme season runs. Not one squeeze. A string of them, hunted out one at a time.

Then the season ends. The crowd runs out of buyers, the names get too expensive, and the shorts get their edge back. The window slams shut fast, so you trade it while it’s open.

I don’t know for sure that Wendy’s is the start of another one of those seasons. Nobody does. But it has the exact fingerprint, so I’m watching for it.

How To Spot The Next One

If the crowd does go hunting, you want to know what it hunts for. The targets all share three things.

1. A low float, so it doesn’t take much buying to move them. 
2. A high percentage of shares sold short, so there’s fuel for a squeeze. 
3. A washed-out chart that’s been bleeding for years, so the crowd can frame it as a rescue.

You can check the short interest yourself in about ten seconds. Google “short float” and the ticker, or ask ChatGPT. A third of the float short, like Wendy’s, is a name to watch.

My 2 Top Meme Stocks To Watch

Two names fit that target profile right now, and I’m watching both.

Serve Robotics (NASDAQ: SERV) has close to 29% of its float sold short as of the latest reporting. It’s an AI-robotics name with a tiny float that ran hard last year, then got cut down and now trades well off its highs.

Groupon (NASDAQ: GRPN) has more than half of its float sold short as of the latest reporting, on an even smaller float. You know the name, and it’s down about 49% over the past year. Same setup as Wendy’s, a beaten-down brand people recognize that the crowd could decide to rally around.

Know The Risks

Here’s the hard part about a meme season. The best moves happen early, before a name blows up across your feed. By the time the crowd piles in, the easy gains are gone and the shorts start clawing their edge back. Miss the front of the move and you’re left chasing the top.

I’d rather get you positioned before that crowd ever shows up.

My system hunts for quiet, heavily shorted names that fit this profile, and every week I hand you at least one fresh setup with a plan to trade it. When the next Wendy’s lines up, you’ll already have the ticker in front of you and a level to watch.

So if you want me in your corner for the next one, come trade these setups with me.

Stay sharp, 

Jack Kellogg

*Past performance does not indicate future results