For Retail Traders, It's 'Full-Blown Meme Mania'

A new wave of meme stock mania is sweeping the market, with big names like Kohl's and Opendoor Technologies leading the charge. Driven by individual investors on platforms such as Reddit and X, this fresh cohort is channeling the spirit of the original GameStop and AMC frenzy, where retail traders rallied around beaten-down companies and pushed back against institutional short sellers. "You see all these indications where this is full-blown meme mania," Brent Kochuba, founder of derivatives-data firm SpotGamma, tells the Wall Street Journal.

A standard Wall Street definition of a meme stock is one "that gains significant popularity and trading volume, primarily driven by social media hype and online communities, rather than the company's fundamental financial performance," per the AP. Kohl's, a department store chain that has struggled with declining revenue and management shake-ups, saw its shares soar by nearly 40% on Tuesday following a surge of online interest, despite widespread doubts about its long-term prospects. Nearly half of Kohl's shares had been sold short, making it a tempting target for traders hoping to trigger a short squeeze, a scenario in which rising prices force short sellers to buy back shares, fueling further gains.

Real estate platform Opendoor Technologies experienced a similar rally. The stock, which traded at less than a dollar just a week ago, skyrocketed 439% in a month after retail investors latched onto it and hedge fund manager Eric Jackson publicly disclosed his position. Also enjoying this week's meme stock ride, per Reuters: Krispy Kreme and GoPro. Opendoor options trading also exploded, surpassing even heavyweights like Tesla and Nvidia, per SpotGamma data. Other companies, including QuantumScape and Rigetti Computing, have also caught the meme stock spotlight, often without clear business catalysts.