Roaring Kitty. Ryan Cohen. Sydney Sweeney?
It may not seem like the famous actor has much in common with the most famous retail trader folk heroes, but Sweeney on Thursday was the unlikely catalyst of a sudden stock surge.
An American Eagle ad featuring the actor went viral on the internet on Wednesday, attracting the attention of not only the clothing retailer’s fans but also the Wall Street Bets crowd, sending shares of the company surging.
The campaign, titled “Sydney Sweeney Has Great Jeans,” is tailored toward drawing in the brand’s Gen Z customer base.
The company’s stock spiked as much as 12% on Thursday.
“$AEO Who doesn’t like Sydney Sweeney. That’s my DD,” one Reddit user said, sharing a captioned screenshot showing a position of 20,000 shares in American Eagle opened on Thursday.
American Eagle shares some characteristics with its meme stock brethren: its short interest level is elevated at around 12% of the total float. That makes the stock a promising target for retail investors looking for a short squeeze.
Related stories
Business Insider tells the innovative stories you want to know
Business Insider tells the innovative stories you want to know
That puts it among the DORKs—Krispy Kreme, Opendoor, Rocket Lab, and Kohl’s—which all rallied this week.
And like Opendoor and the others, American Eagle’s business has been challenged. The new ad campaign featuring Sweeney is part of the apparel company’s move to revitalize the brand amid stiff competition and caution from consumers due to lingering economic uncertainty.
The company’s most recent earnings report showed a 5% drop in revenue, and American Eagle has pulled forward guidance. Despite the recent rally, the stock is still down 32% year-to-date.
But at the end of the day, the rise of particular meme stocks might not have much rhyme or reason. For the retail traders piling in, the investment thesis is simple: they think Sweeney is hot.
“I’m going in too, it’s a meme world now. 🌎🔥,” another Redditor commented.
