Kohl's Stock Surges 30% Amid Meme Stock Speculation

Kohl's stock surged 30% in early trading, temporarily halted due to volatility, with no fresh corporate news. The move could be attributed to meme stock traders eyeing the retailer's shares, which are heavily shorted, making it a candidate for a squeeze. The stock was recently a topic of conversation on Reddit's wallstreetbets forum. Kohl's Q1 results were better than expected, but the company fired its CEO, and Wall Street remains bearish with a mean price target at $8.

Title: Kohl's Stock Surges 30% Amid Reddit-Driven Hype and Short Squeeze Speculation

Kohl's Corporation (NYSE: KSS) experienced a dramatic 30% surge in early trading on Tuesday, July 22, 2025, reaching an intraday high of $21.23 before settling around $13.62. This significant move was triggered by a massive influx of retail investors, primarily from the Reddit community WallStreetBets, who targeted the stock due to its high short interest [1].

The stock's short interest, which stood at around 53 million shares or 49% of its 112 million share float, made it an attractive target for a short squeeze. A short squeeze occurs when a heavily shorted stock rises sharply in price, forcing short sellers to buy back shares to cover their positions, thereby driving the price even higher [1].

The rally was sparked by coordinated buying activity on Reddit, where users pointed to Kohl's high short interest, low share price, and potential long-term upside tied to its real estate portfolio and cash flow as reasons to invest. One user on WallStreetBets posted, “$KSS is next. The short interest is insane. Let’s ride this one to $30+!” [1].

Despite the short-term hype, Wall Street remains cautious. Kohl's Q1 results were better than expected, but the company fired its CEO and faces ongoing challenges such as declining sales and executive shakeups. The mean analyst target price stands at $8, significantly below the current trading price of $16.83 [3].

The stock's volatility led to multiple trading halts throughout the day, with trading volumes surging to over 100 million shares, nearly 20 times its daily average. This extreme volatility suggests that the rally may continue in the short term if more shorts are forced to cover, but history indicates that meme stocks often experience sharp reversals once the hype fades [1].

Kohl's is not alone in experiencing this phenomenon. Children's Place stock (NASDAQ: PLCE), which also faces a high short interest of around 50%, surged nearly 19% on Tuesday, adding to the speculative interest in heavily shorted stocks [1].

Investors should approach Kohl's stock with caution, balancing the excitement of potential gains with the risks of high volatility. While short squeezes can deliver quick gains, they often lead to sharp reversals once the hype fades.

References:
[1] https://m.economictimes.com/news/international/us/kohls-moon-mission-stock-jumps-25-as-reddit-hype-triggers-massive-rally/articleshow/122839851.cms
[2] https://finance.yahoo.com/news/kohls-shares-double-retail-investors-140017387.html
[3] https://www.gurufocus.com/news/2994111/kss-trading-resumes-as-kohls-shares-reopen-kss-stock-news