When a customer claimed to have found a severed finger in a bowl of chilli served at a Wendy’s fast-food franchise in California, the chain’s sales fell by half in the San José area where the incident was reported. Wendy’s brand and reputation were at risk, until the claim was exposed as a hoax in late April and the company, operator of America’s third-biggest hamburger chain, was vindicated.
Yet the share price of Wendy’s International, the parent company, rose steadily through March and April, despite the finger furore and downgrades from analysts. One reason was heavy buying by hedge funds, led by Pershing Square Capital. This week Pershing made its intentions public, saying that it was worried by market rumours that Wendy’s might soon buy more fast-food brands, and arguing that the firm should be selling assets instead. Pershing’s approach indicates rising pressure on American restaurant companies to perform, at a time
A. The woman’s claim was reported as a mistake.
B. Wendy’s is American’s third-biggest hamburger chain.
C. Pershing Square Capital bought a large amount of its shares.
D. Wendy’s will buy more fast-food brands and assets.
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