Kohls stocks saw a dramatic 37% jump on Tuesday, leading to a temporary halt in trading due to extreme volatility. The increase coincided with an increase in discussion on Reddit’s Wall Street Bets, where retail investors have recently taken an interest in the department store. Because of its well-known brand and high short interest, Kohls Stocks is a popular choice for investors hoping to profit from a possible short squeeze.
The Kohls Stocks initially soared, more than doubling in value from Monday’s close of $10.42 per share, before quickly losing those gains after the opening bell. The wild swings led to a temporary trading halt within the first half hour of the session.
Shares ended the day 37% higher despite the early volatility, and trading volume surged to almost 17 times the average for the previous 30 days.
It’s interesting to note that there were no significant company announcements or changes in analyst ratings that would normally cause this kind of spike. However, Kohls Stock is showing all the signs of becoming a meme stock. The iconic department store, a familiar name for many retail investors, is dealing with a heavy short interest, with about half of its shares currently sold short, according to data from FactSet.
With a network of more than 1,100 stores, Kohl’s has been the target of takeover offers, activist campaigns, and is even being watched for possible bankruptcy.
Neil Saunders, managing director of Global Data, noted, “The surge in Kohls Stocks resembles the kind of irrational excitement we saw with stocks like Bed Bath & Beyond. There’s no real business improvement here to justify the jump—Kohl’s fundamentals remain quite weak.”
The buzz on Reddit’s Wall Street Bets has been especially loud, as some users speculate Kohl’s could be the next big short squeeze candidate, given its high short interest and retail investor following.
In short squeezes, investors who’ve bet against the Kohls Stocks (those holding short positions) may rush to buy shares to cover their positions, which in turn drives the stock price even higher.
Even though the stock might be receiving more attention, Kohl’s company has continued to face difficulties. After Ashley Buchanan was fired due to a conflict of interest scandal, the company is now run by an interim CEO, sales have been dropping, and competition is getting fiercer.
Looking ahead, Kohl’s has already warned of expected sales declines of 5% to 7% in fiscal 2025, with comparable sales forecasted to fall between 4% and 6%.
Key Points: Kohls Stocks
- Kohl’s Stock Surge: On Tuesday, Kohl’s stock jumped 37%, causing trading to temporarily halt because of the high volatility.
- Reddit Buzz: The increase has been fueled by conversations on Reddit’s Wall Street Bets, where people have been talking about how popular the stock is with retail investors and how much short interest there is in it.
- Price Fluctuations: Shortly after markets opened, the stock lost the gains it had made from around $10.42 to higher levels, causing a brief halt in trading.
- Trading Volume Spike: The trading volume was almost 17 times greater than the 30-day average by late morning.
- No Major Announcements: The price increase happened without any noteworthy corporate news, indicating that retail speculation was the primary driver of the spike.
- Meme Stock Potential:
Kohl’s shares show characteristics of a meme stock—familiar name, heavy short interest (around 50%), and a popular target among retail investors. - Challenges for Kohl’s:
Despite the stock’s volatility, Kohl’s has been struggling with declining sales, rising competition, and leadership instability (interim CEO after a scandal). - Future Outlook:
Kohl’s projects a sales decline of 5% to 7% in fiscal 2025, with comparable sales expected to fall 4% to 6%.
Disclaimer:
The content provided in this article is for informational purposes only and does not constitute financial advice. The information presented is based on publicly available data and reflects the author’s opinions at the time of writing. Always conduct your own research and consult with a qualified financial professional before making any investment decisions. Investing in stocks involves risk, and past performance is not indicative of future results.
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