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Dear Fellow Investor,
Don’t Be So Quick to Jump into Red-Hot Meme Stocks
A few years ago, we witnessed a financial revolution driven not by Wall Street suits, but by Reddit users in hoodies.
GameStop (SYM: GME), AMC Entertainment (SYM: AMC), and Bed Bath & Beyond were all launched into the stratosphere by a massive surge in retail interest—fueled by viral posts, TikTok hype, and the collective power of online communities like WallStreetBets. Hedge funds were caught flat-footed, short positions got crushed, and fortunes were made (and lost) seemingly overnight.
Now, it’s happening again.
Over the last few days, several heavily-shorted, overlooked stocks have surged as meme stock mania appears to be back in full swing. But before you throw caution to the wind and jump in headfirst, it’s worth taking a closer look at what’s driving this—and why blindly chasing the next rocket can be dangerous.
Company: Kohl’s (SYM: KSS)
The Latest Meme Stock Meteor
Retailer Kohl’s (SYM: KSS) became one of the latest meme stock sensations this week, exploding from a low of $10.52 to a high of $19.53 in just a matter of hours.
This wasn’t because of blockbuster earnings, a surprise acquisition, or a viral product launch. The real reason? Short interest and social media.
Kohl’s, like many meme stocks before it, had been beaten down for months and became a target for Reddit traders who seek out highly shorted, underperforming names with the potential to trigger massive short squeezes.
And with roughly 33% of its float sold short (about 24.16 million shares), KSS was primed for exactly that. Once momentum started building online, it was only a matter of time before traders piled in, forcing shorts to cover and sending shares surging.
But here’s the catch: the rally didn’t last.
The very next day, shares gave up part of their gains as profit-taking set in. This is a critical point that meme stock traders often overlook—the window for profit is often extremely narrow, and those who hesitate can be left holding the bag.
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Company: Rocket Companies (SYM: RKT)
A Powder Keg Waiting to Ignite?
While Kohl’s has already popped, Rocket Companies (SYM: RKT) may be next in line for meme stock stardom.
Rocket is a diversified financial services company best known for Rocket Mortgage. While it hasn’t yet gone vertical, it's already attracting serious buzz from the meme stock crowd.
Here’s why: RKT currently has a staggering 60.75% short interest—that’s more than 73 million shares betting against the stock.
That kind of bearish positioning is like gasoline just waiting for a spark. And the spark may already be here.
Mentions of RKT on Reddit are up over 2,400%, and it currently sits atop WallStreetBets' most-discussed tickers. If enough retail momentum piles in and shorts are forced to cover, a short squeeze of epic proportions could unfold.
Still, the fundamentals haven’t changed overnight. Like many meme names, Rocket remains a company facing operational challenges. Investors need to tread carefully and be aware of the risks beneath the surface.
Company: GoPro (SYM: GPRO)
Meme Mania Returns to a Familiar Face
Another name that’s suddenly back in the spotlight is GoPro (SYM: GPRO).
The action camera company, which was once a meme stock darling years ago, saw its shares nearly double this morning on the back of online hype and a surge in short-term trading activity.
According to StockTwits, sentiment on the platform went from "bullish" to "extremely bullish" in less than 24 hours. Retail chatter skyrocketed by more than 1,200%, propelling the stock higher in a frenzy of buying.
GoPro’s short interest currently sits at around 9.5%, or 12.1 million shares—less than KSS or RKT, but still enough to fuel a quick burst of upside under the right conditions.
This kind of move reminds us how quickly these names can go from forgotten to front-page news in the span of a single day. But just as quickly, they can fall back to Earth.
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Company: Krispy Kreme (SYM: DNUT)
Sugar-Coated Hype?
Krispy Kreme (DNUT) is another name that suddenly found itself swept up in meme stock fever.
With short interest at 33% (again, around 24 million shares), DNUT exploded higher in early trading as social media chatter surged. According to StockTwits, mentions of the stock jumped an incredible 7,100% in one day, and sentiment flipped from bearish to “extremely bullish.”
As with the others, this move wasn’t based on a strong earnings report or business turnaround—it was fueled by the same Reddit momentum that powered GameStop and AMC.
A Word of Caution
While meme stocks can be thrilling—and incredibly lucrative if timed right—they’re also inherently risky. Volatility is extreme. Fundamentals are often ignored. And gains can disappear just as quickly as they arrive.
Just look at Kohl’s again. The stock nearly doubled in one day, then immediately gave back a chunk of those gains. Traders who didn’t take profits fast enough were left with losses.
Here’s the truth: Meme stocks are driven more by emotion, narrative, and online buzz than by fundamentals or long-term growth potential. This means timing is everything—and unfortunately, most retail traders aren’t able to consistently pick the right entry and exit points.
If you’re going to play in this arena, treat it like a short-term trade, not a long-term investment. Use tight stop losses. Be prepared to act quickly. And never risk more than you can afford to lose.
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