Sydney Sweeney sparks a $346 million Wall Street surge with new ad

A US clothing brand has had its share price surge in a “meme stock” frenzy after announcing an advertising campaign featuring actor Sydney Sweeney.

Clothing brand American Eagle Outfitters had its stock jump as much as 12 per cent in New York after it announced that the Euphoria and The White Lotus actor would star in a new advertising push.

The surge added nearly $US228 million ($346 million) to its market value at one stage. Shares in the company closed more than 4 per cent higher.

Sweeney will appear in a campaign for its winter denim collection that includes a limited-edition jacket as well as “The Sydney Jean”.

While advertising campaigns can and do influence a company’s performance and Sweeney is one of the most recognisable actors in the US, analysts said the scale of the share price jump was untethered from reality.

The sharp upswing comes after the retailer gained attention on Reddit’s WallStreetBets, a forum known for fuelling so-called extreme rallies in the share prices of so-called meme stocks.

Meme stocks are companies where the share price is driven by social media hype and online communities, rather than the company’s fundamental financial performance.

The phenomenon emerged during the pandemic as people turned to trading as a way to entertain themselves during lockdowns.

‘Gamblification’ of sharemarkets

The term meme stock was coined after companies including GameStop and Blackberry saw their share prices surge in 2021 despite little in the way of updates about their underlying performance.

The vertiginous rally triggered the collapse of a hedge fund that had bet against GameStop’s stock and helped inspire the 2023 film Dumb Money starring Paul Dano.

American Eagle’s stock was down almost 50 per cent so far this year prior to this week’s rally after it pulled its annual forecasts because of tariff uncertainty.Credit: Bloomberg

American Eagle’s stock was down almost 50 per cent so far this year prior to this week’s rally after it pulled its annual forecasts because of tariff uncertainty. The company primarily sources its products from China.

Ross Mayfield, an analyst at Baird Private Wealth Management, said meme stocks were a symbol of how stock markets had been “gamblified”.

He said: “It says to me nothing about the level of interest rates or financial conditions. This is retail traders moving individual stocks that are heavily shorted.

“It reflects more the gambling culture permeating financial markets. These are not being bid up because of a good earnings report. It’s because of a Sydney Sweeney ad campaign.”

Sweeney, who has 25.2 million followers on Instagram, has fronted campaigns for the likes of Ford, Baskin-Robbins ice cream and luxury fashion brand Miu Miu.

As well as being known for her screen roles, Sweeney has become a prominent figure in popular culture and found herself wrapped up in North American culture wars.

After her appearance hosting Saturday Night Live, in which she appeared in a sketch as a Hooters waitress, Canadian newspaper the National Post that declared the actor’s breasts were the “double-D harbingers of the death of woke”, a claim that sparked a wave of commentary on both sides of the political spectrum centring on her physical appearance.

Meanwhile, Sweeney was criticised by commentators on the left in 2023 after she attended a birthday party for her mother where guests were pictured wearing MAGA-style caps.

Telegraph, London

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