Potential Trian Deal Sends Wendy's Stock Higher

The stock is set to topple a key trendline for the first time since early April

Digital Content Manager
May 25, 2022 at 10:43 AM
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Long-time shareholder Trian Partners, which holds a 19.4% stake in Wendy's Co (NASDAQ:WEN), said it was exploring a potential deal with the fast food company, per a filing. Trian is already the largest shareholder of Wendy's and said that its goal for the deal was to "enhance shareholder value." Further detail, including what type of deal the two firms will proceed with, has yet to be decided. In response to the news, WEN is up 9.3% at $17.79. 

The equity is set to log its first close above the 10-day moving average since early April, should these gains hold. The stock has been struggling to distance itself from its May 11, two-year low of $15.76, after the company missed its first-quarter earnings estimates. The stock is still down 25% in 2022, though it's on pace to snap a nine-week losing streak. 

Options traders are targeting WEN at an elevated clip, with 2,859 calls and 953 puts across the tape so far -- three times the intraday average. The June 19 call is the most popular, followed by the 18 call in the same series, with positions being sold to open at the former. 

These options traders are in luck, as Wendy's options can be had for a relative bargain right now. The security sports a Schaeffer's Volatility Index (SVI) of 38%, which sits higher than just 10% of readings from the past year. In other words, options players are pricing in relatively low volatility expectations at the moment. 

 

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