Cracker Barrel’s marketing fiasco shows investors are making woke a massive

If the Cracker Barrel market puke has anything to teach Wall Street, it’s that investors who are deciding where to put their money must add corporate “wokeness” to their menu of risks to ­digest.

In fact, making “woke” an investing risk factor — in some cases as important as the direction of interest rates and inflation — seems so obvious that I hesitated to write this column. Recall Bud Light’s ­Dylan Mulvaney fiasco, or Target CEO Brian Cornell’s recent exit following his ill-fated ­obsession with DEI.

Wokeness is generally defined as subjecting the culture and business to left-wing dogma involving race, sex and viewing all things Americana as anathema. It simply doesn’t sell to mass audiences.

And yet companies keep going there. Corporate managers, it turns out, are a politically and socially tone-deaf bunch. They are lousy at reading the current mood of the country and its hatred of progressive indoctrination — whether in the classroom or when they simply want to enjoy a beer. Their advisers may be even worse.

That’s why shareholders must demand — whether it’s at annual meetings, on earnings calls or with testy phone calls to Investor Relations — that the C-suite extricate wokeness from corporate decision-making.

While it’s not mainstream, there are some savvy Wall Street types adding “woke risk” to their models, just not using that exact terminology. Bob Sloan, founder of the data analytics firm S3 Partners (and my co-host on the “Risk and Return” podcast), is among them. For weeks he has been watching Cracker Barrel’s stock for an unconventional catalyst that could send it higher or lower.

The data he came across suggested the stock was ripe for something big even if big isn’t something you might associate with Cracker Barrel. It’s a relatively sleepy restaurant chain that has been around for decades.

 It features country-style food at highway rest stops mainly in middle America. It’s known for its yellow signage and its image of “Uncle Herschel,” an old white guy clad in overalls and seated next to the eponymous barrel.

It has a smallish market cap; around $1.2 billion. It’s profitable though it faces some headwinds like all mature businesses.

What caught Sloan’s eye a few weeks ago is what S3 specializes in: Looking at investor sentiment around a stock. That is, the degree to which investors believed in the stock and were “active” longs (they might buy more under the right conditions), and those who were bearish, so-called active shorts betting against it and willing to double down on their bets.

Sloan noticed the active long and short sentiment was pretty evenly split. “That means all it takes is some event to move shares significantly in either direction,” he tells me.

Cracker Barrel shares, trading under the symbol of CBRL on the Nasdaq, were placed on…