Wendy's investors got whiplash on Thursday. Shares of the burger chain plunged as much as 14% in premarket trading and settled down roughly 13% on the day after Reuters reported that Nelson Peltz's Trian Fund Management has stepped back from a potential deal to take the company private.

The stock, which had been trading in the low $9s just days earlier, slid to around $7.90, according to TipRanks, dragging Wendy's market value back down toward roughly $1.7 billion. Trian, which owns about 16% of the company and has been one of its longest-tenured shareholders, had reportedly been assembling a consortium — including BlueFive Capital and franchisee-backed Flynn Group — to delist the stock entirely.

What spooked the buyers

Sources told Reuters that Trian's cold feet stem from concerns over Wendy's recent trading price, its valuation multiples, and the direction of its turnaround strategy under CEO Bob Wright, who took the top job in May. The chain has been struggling with weak customer traffic, inconsistent restaurant operations, and heavy reliance on discounting — problems bad enough that management withdrew its full-year guidance and cut the dividend earlier this year after second-quarter same-restaurant sales fell 7% domestically and 2.3% internationally.

Trian is "keeping an open mind about its future intentions," people familiar with the matter told Reuters — leaving the door open, but not much of one, for a deal to resurface.

The reversal wipes out a rally that began August 12, when initial reports of Trian's takeover interest sent shares up nearly 15% in a single session and had speculative investors betting on a buyout premium. Thursday's drop essentially returns the stock to where it traded before the takeover chatter began, according to Yahoo Finance's coverage of the report.

Wall Street's read on the collapse was blunt. Analysts covering the stock carry a consensus "moderate sell" rating, with an average price target around $7.39 — implying further downside even after Thursday's slide, per TipRanks data. The forward price-to-earnings ratio sits near 11x, reflecting deep skepticism about the fast-food chain's ability to turn around traffic trends without a buyout to force the issue.

What happens next largely depends on whether Trian's patience holds. Activist investors who walk away from a stated deal sometimes return once a stock has fully round-tripped its takeover premium — and with Peltz's firm still sitting on a 16% stake, Wendy's board and Wright's management team will be operating under close watch as they try to fix operations without the pressure, or the price floor, that a take-private bid would have provided.