American Eagle’s (NYSE: AOE) latest jeans ad featuring actress Sydney Sweeney resulted in a lot of controversy.
Amid the backlash caused by over-sexualized advertising tropes, for instance, the total store visits across the U.S. fell 3.9% last week, according to data from retail analytics firm pass_by.
However, the ad, which has since been removed from the company’s social media channels, actually propelled American Eagle stock up nearly 19% in the same time period.
Nonetheless, AEO shares are now down nearly 27% year-to-date, trading at $12.60 at press time.
Short Squeeze alert for American Eagle stock
Adding fuel to the fire, President Donald Trump weighed in on the situation on Monday, August 4, via Truth Social, writing:
“Sydney Sweeney, a registered Republican, has the ‘HOTTEST’ ad out there. It’s for American Eagle, and the jeans are “flying off the shelves.” Go get ‘em Sydney!”
While American Eagle still claims the ad has always been about the jeans, and Sweeney herself is yet to issue a public statement, the viral developments alone have left many watching for signs of a potential short squeeze.
Short interest in American Eagle was already at 31% prior to the campaign. Something similar happened recently with Avis Budget Group (NASDAQ: CAR) and Carvana (NYSE: CVNA), although the 2021 GameStop (NYSE: GME) frenzy remains the most famous example.
Given the ad’s viral success, Trump’s endorsement, and endless social media discourse, American Eagle could very well approach the meme stock status as well, especially since its shares continue to rise.
Of course, the company’s fundamentals are still questionable, so any long-term success must hinge on more than a single ad campaign. But for now, all eyes are on American Eagle.
Featured image via Shutterstock
