Meme Stocks Return as Markets Turn Frothy: KSS, DNUT, OPEN Lead the Charge

Meme stocks are gaining popularity among retail investors as markets turn frothy. Stocks like Kohl's, Opendoor, Krispy Kreme, and GoPro are being targeted for short squeezes due to high short interest among Wall Street firms and hedge funds. These stocks tend to surface when bull rallies are accelerating and markets are at or near all-time highs.

Meme stocks have been gaining significant traction among retail investors, with volatile movements often driven by social media platforms like Reddit's r/WallStreetBets. Companies such as Kohl's, Opendoor, Krispy Kreme, and GoPro have recently seen their shares surge due to high short interest and coordinated efforts by retail traders.

Kohl's Corp. experienced a meteoric rise on July 2, with shares surging as much as 105% in early trading, triggering a market halt due to volatility. This was followed by a 39% gain for the day, marking Kohl's largest one-day jump in history [1]. The rally was fueled by coordinated efforts on platforms like Reddit, driven by retail investors betting on a short squeeze. Despite the retailer's weak fundamentals, such as declining sales and a shift in consumer preferences toward online shopping, the stock briefly more than doubled in early July, defying historical performance [5].

Krispy Kreme and GoPro were among the companies riding the latest meme stock rally on Wednesday, with shares of Krispy Kreme jumping 25% and GoPro soaring 62% [2]. Plant-based meat company Beyond Meat also gained 10.4%, reflecting the trend of retail traders targeting highly shorted stocks.

The growing interest in heavily shorted stocks comes after Kohl's surged 37.6% on Tuesday, with the highest daily inflow from mom-and-pop traders in about three years [2]. This phenomenon, known as a short squeeze, occurs when investors who had sold borrowed shares are forced to buy shares to close their losing positions.

The rally has raised questions about the sustainability of such surges and the broader market implications. Unlike traditional value-driven investing, meme stock movements are often ephemeral and driven by social media trends rather than corporate performance. The event highlights the growing influence of retail investors in shaping stock prices, even for well-established companies, and sparks debates about the role of social media in financial markets and regulatory challenges posed by decentralized trading communities [8].

References:
[1] https://fortune.com/2025/07/23/kohls-meme-stock-retail-trading-shares-double-reddit-wallstreetbets/
[2] https://www.reuters.com/business/retail-consumer/highly-shorted-krispy-kreme-gopro-surge-latest-meme-stock-frenzy-2025-07-23/
[5] https://www.alphaspread.com/market-news/stock-movements/kohls-stock-soars-amid-surging-retail-investor-interest
[8] https://m.economictimes.com/news/international/us/kohls-moon-mission-stock-jumps-25-as-reddit-hype-triggers-massive-rally/articleshow/122839851.cms