Image Source: Restaurant Clicks
Wendy’s is seeing a 15% surge in its stocks after Trian, the largest stakeholder of the company, announced possible future deals with them.
Billion-dollar investment firm Trian Partners filed a hedge fund for Wendy’s, saying it aims to “enhance shareholder value.” The firm holds about a 19% stake in Wendy’s restaurant chain.
In a statement, the firm said they were able to gather advisors together with Wendy’s higher-ups so they could discuss possible strategies and options.
Management at Wendy’s has announced that they are open to any proposal since their goal is to “maximize value for all stockholders.” They further state the board will carefully assess Trian’s pitches and strategic options.
“At that time, Wendy’s was one of America’s most beloved brands, but the business had lost its way after the passing of its founder Dave Thomas,” said the firm recalling how they purchase shares from the company. CEO and founder Nelson Peltz assumed bought the shares in 2005.
Currently, Peltz owns one seat on the board out of three that Trian Partners own.
Wendy’s has over 7,000 locations across the United States. During the first quarter this year, they had increased sales by 2.4%. The company has also declared a net income of $37.4 million, or roughly 16 cents per share). The recorded quarterly revenue is down by 10% less when compared to last year’s figure of $41.4 million.
Trian continues to help the fast-food chain develop its brand. According to Titan, Wendy’s should continue to improve its operations and solidify its brand among consumers.
Over the years, the company has tried to come up with a different menu to provide variety to its customers, including launching its own breakfast menu in March of 2020. However, the plan of the company to overtake fast-food giants like McDonald’s and Burger King was put to a halt after the COVID-19 pandemic.
With the recent lockdown restrictions by the US government, Wendy’s has been experiencing a decrease in sales like any other company across the country.
Despite a myriad of challenges, Wendy’s continued to cater to their customers, and now that the market has reopened, the possibilities are now opening for the company as well – one such is the recent announcement by their shareholder, Trian Partners.
While inflation rates continue to go up, BMO Capital Markets downgraded Wendy’s market stocks, lowering the price target from $28 to $22. Following the announcement by BMO, Wendy’s saw a 2.5% drop in its stocks.
The management at Wendy’s is hopeful that with the new development, they will be able to address some losses. However, it has not yet been announced how this fund might help them out in their current situation.