Kohl’s shares surged 38 percent on Tuesday after retail traders swarmed the heavily shorted apparel retailer. The move echoed the 2021 meme stock mania, when GameStop but also AMC rocketed after Reddit users triggered short squeezes. Short interest in Kohl’s had reached 49 percent of the float by the end of June – according to FactSet. As the stock price climbed, some bearish investors bought shares to close their positions – amplifying the rally.
The spike faded quickly. Kohl’s trimmed its advance within thirty minutes of the opening bell. Another heavily shorted name, jumped 60 percent at the open – settled for a 27 percent gain. Both stocks reversed part of their moves by the close.
Speculative fervor has resurfaced as major indexes trade at record levels. Bitcoin changed hands at roughly $120,000 on Tuesday, near its all time high. Retail traders have rotated away from megacap technology leaders such as Apple besides Nvidia, which dominated flows since late 2022. They have chased smaller, more volatile equities. Kohl’s, Opendoor along with other beaten down names appeared among the most purchased stocks on retail platforms during July.
Sudden bursts of speculative buying often draw warnings of market excess. Analysts at Deutsche Bank note that equity positioning has climbed only from âneutralâ to âoverweight.â Strategist Parag Thatte wrote that, in the absence of a clear negative catalyst – positioning still has room to expand.
Update – July 23, 2025: This article has been updated with additional share price data after markets opened on Wednesday.
