Kohl's

We've seen another mean stock craze this s What was just okay? Quarter was okay. Just okay. Okay. I mean not anyt So not somet Absolutely not. The Legacy Department store saw its stock soar on July 22nd. Since then, it's fallen, but still remains elevated. We've seen it before, the rapid gains and losses of cheap stocks of well-known companies. I mean who am I to say that's bad investing? But it just doesn't seem to be investing at all. You have the mean stock buyers having that opportunity to kind of stick it to institutional investors to smart money and it's just because we have power in n So how exactly does t A mean stock is a stock that trades with volatile swings in its share price that isn't based on the underlying business fundamentals. Typically they are cheap and heavily shorted, meaning retail investors have bet on the price of the stock to go down. When you're shorting a stock, you borrow it from a broker and then you immediately sell it on the open market. Let'say I sell it for $100 a share, but I'm hoping it goes down to $50 a share. I sell it, I get that $100. And then when the stock goes down to $40 or $50 a share, I bet it's going to be $50 I buy it back on the open market, I return it to the broker that lent it to me and I keep that $50 profit. So you can make huge profits on shorting a stock, but your losses are also exponential because I borrowed the stock, I sell it at $100 and then it goes up to $150. It doesn't go down to $50 So now I have to pay $150 to buy it back off the open market because I still have to return it to my broker. When the short sellers j So what you end up is the fluctuations tend to vary, but it is very much a social media phenomenon. Hence the name mean stock because it comes from kind of social media trends and people picking up on it. And a lot of the people involved can be very casual investors, they can be people who do investing from their own homes, people who just love to dabble and play with the markets. They're not traditional Wall Street investors. GameStop is widely recognized as the first meme stock. A user by the name of Roryn Kitty set off alarms on the Reddit thread Wall Street Bets about the gains he had made on investments in the stock. It led to hordes of investors coming together on Reddit and inflating the share price. You had kind of t It was heavily shorted. You had Roryn Kitty pounding the dr And so you were able to drive the prices up to insane The hedge funds that had shorted it needed bailouts, lost billions and billions of dollars. And so GameStop is kind of a story in and of itself, but that same kind of idea has moved to other legacy penny stocks, dead names, not just retailers, but you see a lot of that in the retail industry. And that's where Kohl's comes in. Going into July 22nd, about 50% of the trading activity around Kohl's was investors shorting the stock. Much Kohl's is a well-recognized name. It's a household name. And it's much easier to get people interested and excited about manipulating a household name than it is with a relatively unknown stock. And I think that recognition is quite important in allowing almost the meme or the narrative to spread and for more people to j Kohl's c A Kohl spokesperson told CNBC that t In the days following Kohl's meme stock surge, GoPro, American Eagle, and Krispy Kreme also saw sharp swings in their stocks. Once again, Reddit users came together to short squeeze the company'stocks. Open Door Technologies was another name that exploded in July, even before Kohl's, but it was mainly driven by hype from one hedge fund manager in particular. It can be really hard to predict what's going to be the next big frenzy. It's typically companies that might have a household name. Maybe some nostalgia factor, right? You had a bed, bath, and beyond was a meme stock. Kohl's is obviously a department store that many grew up shopping in. GameStop, we know about that one. AMC, GoPro, and Krispy Kreme are certainly household brands that we all know. So any company that's really down, heavily shorted, it could be the next meme stock, but it's really hard to predict w Here's a one month look at the share price of other companies that got thrown into the meme stock frenzy along with Kohl's. One common thread amongst these stocks are that they trade cheaply. Kohl's business, for example, has been on the decline for years. From the beginning of July, 2021 to the start of July, 2025, Kohl'stock price was down around 85%. The company has seen shrinking sales and declines in profitability. A 2024 report from Global Data found that Kohl's has lost 1. 3 million customers over the previous five years, two competitors Sephora has helped them to grow, but in a way that just shows the weakness of Kohl's because most of the beauty growth has been driven off the back of the Sephora brand. It hasn't been driven because the Kohl's brand is great. So Kohl's is in a very, very difficult position. They're trying different they are experimenting. They obviously had problems with their CEO at the start of t So there's a lot of moving pieces at Kohl's, but the general message is t In 2019 and 2024, its Sephora partners Still, overall sales are down 18. 5% during the same time period. And when the beauty segment is stripped out, sales are down around 26%. W But of course, there is a danger with all these kind of financial maneuvers because a lot of people piled into bed baths and beyond believing that the firm actually had a future and of course it didn't. It went bankrupt and there were a lot of retail investors that lost money from buying the share prices at inflated levels. Some ways, having these wild swings, if they persist, it is a distraction from the day to day. And that's where Kohl's needs to focus. It's on the day to day.