Meme stocks pare gains as highly shorted Krispy Kreme, GoPro join the frenzy
Individual investors have been betting on riskier pockets of the market, including cryptocurrencies and lower-priced consumer-facing stocks, as the broader equity market has soared to record highs recently.
Shares of doughnut chain Krispy Kreme, nearly 32% of whose free float has been shorted, ended up 4.6% at $4.32. Earlier the stock hit a session high of $5.73, with a record trading volume of more than 151 million shares.
The stock had rallied nearly 27% on Tuesday with 44 million shares changing hands compared with the 5.28 million average for the last 50 days. Earlier on Tuesday, Krispy Kreme was among the top trending stocks on Stocktwits, a retail investor-focused social media platform.
Action camera maker GoPro's shares rose 12.4% to $1.54 after earlier hitting $2.37, the highest level since late March 2025. Plant-based meat company Beyond Meat (BYND.O), opens new tab added 1.4% after earlier hitting $4.82, its highest level since December 4.
Many individual investors did well by taking risky bets when institutions were selling in April, when equity volatility erupted over uncertainty around U.S. tariff policies, according to Steve Sosnick, chief strategist at Interactive Brokers, which has a high number of retail customers.
'That has given them the financial wherewithal and the psychological temperament to seek out risky situations. They were rewarded handsomely for embracing risk at a very risky time," Sosnick said. "Now they're extending it to search for high-risk situations that have potentially high returns.'
With the paring of gains on Wednesday, Sosnick said the staying power of the meme-type rallies seemed to be shrinking.
"People realize that there isn't a fundamental reason for these rallies to be occurring. They're simply occurring at the intersection of social media and the stock market," he added.
Daniela Sabin Hathorn, senior market analyst at Capital.com wrote that risks are as stark as the rewards in meme rallies.
"These surges are often disconnected from company fundamentals and can reverse violently. Traders who chase momentum without an exit strategy may be caught in painful drawdowns," she said.
The current market revived memories of the Reddit-driven meme stock frenzy of 2021, when amateur investors pushed up shares of video-game retailer GameStop (GME.N), opens new tab and cinema chain AMC (AMC.N), opens new tab, burning hedge funds that were on the other side of the trade.
Opendoor Technologies (OPEN.O), opens new tab, an e-commerce platform for residential real estate, was among the first stocks involved in the current meme wave. While it is still up almost 330% for July, it lost 20.5% on Wednesday to close at $2.29, a far cry from a July peak of $4.97 - its highest level since August 2023.
Some market participants attributed the Opendoor rally to X.com posts last week by EMJ Capital founder and portfolio manager Eric Jackson, who said his hedge fund took a position in Opendoor and projected it would hit $82 in the longer term.
"When I first started tweeting about Opendoor last Monday afternoon, I definitely wasn't thinking it was going to be considered a meme stock," Jackson said on Wednesday.
Social media platform Reddit's r/WallStreetBets, the 40th largest subreddit with 19 million members, was abuzz with screenshots of bullish bets on Opendoor and Kohl's by amateur traders.
Department store Kohl's (KSS.N), opens new tab shares surged 37.6% on Tuesday with the highest daily inflow from mom-and-pop traders in about three years, Vanda Research data showed. But on Wednesday the stock appeared to exemplify the fickle nature of meme stocks with a 16% decline on the day.
Online gifts retailer 1-800-Flowers.com (FLWS.O), opens new tab, with a short interest on 71.66% of its free float, ended up 4.4% after jumping about 27% earlier in the day. According to Ortex research, moves in Beyond Meat and 1-800-Flowers.com were most susceptible to a short squeeze.
A short squeeze occurs when investors who had sold borrowed shares in the hopes of making money from a share price decline are forced to buy shares to close their losing positions.
Another notable mover without news announcements on Wednesday was Pineapple Financial , which rallied 70% to $5.95. More than 25 million shares changed hands versus the previous session's volume of less than 1 million shares. The stock hit a session high of $9.53 earlier on Wednesday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
6 minutes ago
- Daily Mail
Americans encouraged to Venmo and Paypal the government to pay off national debt
As the US national debt nears $38trillion, the government has proposed a novel way for citizens to help pay off the tab. Americans are being encouraged to make donations with their Venmo and Paypal accounts. The option for a 'gift to reduce the Public Debt' was added to the US Department of the Treasury website a few months ago. It means that philanthropic residents with a burning desire to pay off Uncle Sam's debt will now have the option to use those methods, alongside traditional ones such as account transfers and credit and debit card payments. Allowing citizens to pay off the national debt - among other tabs - is nothing new, as the US Treasury, run by Scott Bessent, has long offered the option since 1996. But it seems they are now tapping into more popular payment systems, like Gen-Z favorite Venmo, to make it more easily accessible for those hesitant to attach their card and bank details. The current national debt stands at $36,721,531,033,602, as of Friday. As the US national debt nears $38trillion, Americans are now being encouraged to help pay off the tab with their Venmo and PayPal accounts Allowing citizens to pay off the national debt - among other tabs - is nothing new, as the US Treasury, run by Scott Bessent, has long offered the option since 1996. But it seems they are now tapping into more popular payment systems, like Gen-Z favorite Venmo It's up $34.5billion from the previous day, Treasury Department numbers show. The debt has grown each year since 2001, where it was at $10.3trillion and it doesn't appear the US will downsize its growing bill anytime soon after passing the Big Beautiful Bill. President Donald Trump's prized bill will add $3.4trillion to the debt over 10 years. The federal government also spent nearly $7trillion in the 2024 fiscal year, but collected approximately $5trillion. The US Treasury Department has burned through cash at a historic rate in March - an alarming signal that may require lawmakers to intervene to prevent the country from defaulting on the national debt. The agency burned through $286billion in the month of March alone. This is the largest single-month drawdown in American history, and it's only rivaled by the Treasury spending $279billion in August 2021 during the height of the pandemic. The change to payment methods was first spotted by NPR's Jack Corbett on X. Though it may seem unlikely that any American citizens would willingly hand the government more money, the feds have garnered $67.3million through the donation program since its inception. Although it may seem like a large amount, the government burns through that it less than a half an hour.
BBC News
38 minutes ago
- BBC News
Allianz Life: Insurance giant says most US customer data stolen in cyber-attack
Hackers have stolen personal information of a majority of insurance firm Allianz Life's 1.4 million customers in North America, its parent company said."On July 16, 2025, a malicious threat actor gained access to a third-party, cloud-based CRM system used by Allianz Life Insurance Company of North America (Allianz Life)," Allianz said in a statement to the BBC. The German parent company added that the hackers were "able to obtain personally identifiable data related to the majority of Allianz Life's customers, financial professionals, and select Allianz Life employees, using a social engineering technique".The data breach was only related to Allianz Life, according to the company. The insurance company disclosed the data breach in a legal filing with the attorney general in the US state of Maine. It did not specify how many people had been affected. In the statement, the insurance company said it had taken "immediate action" to contain the breach and had notified the FBI. It said that there was "no evidence the Allianz Life network or other company systems were accessed, including our policy administration system". Allianz - which has over 125 million customers globally - added that it was in the process of contacting and assisting the individuals affected by the data breach. A social engineering cyber-attack is when hackers pressure or trick users into giving away sensitive information, such as by impersonating a trusted company or person.
The Guardian
an hour ago
- The Guardian
From Krispy Kreme to GoPro, has meme-stock trading frenzy returned?
Shares in struggling retailers and ageing consumer brands surged, as amateur traders cast aside Wall Street's skepticism and mobilized online. It's like 2021 all over again. But the latest meme-stock rally could be even bigger than its predecessor four years ago, when investors piled into recognizable but unloved stocks, such as the video games retailer GameStop and the movie theatre chain AMC, according to the founder of the Reddit forum that helped whip up the frenzy. Retailer Kohl's, camera firm GoPro, fast-food chain Wendy's and doughnut chain Krispy Kreme each staged rapid rallies this week, driven by abrupt surges in trading volume reminiscent of the the meme-stock craze of 2021, when social media memes boosted a collection of struggling stocks, triggering extraordinary and volatile leaps in value. Actress Sydney Sweeney helped bring clothing retailer American Eagle Outfitters into the mania after it was announced the Euphoria and White Lotus star would front the brand's latest marketing campaign. The company's shares surged about 10% in trading on Thursday. Meme stocks are 'about to leap-frog in size and scope and scale, so that retail traders are going to redefine what matters', according to Jaime Rogozinski, founder of the wallstreetbets Reddit forum behind many of the volatile rallies. 'The world of finance is clearly changing, with blockchain technologies encroaching, and AI agents that trade on their own,' he said. 'And the collective of retail traders is adapting along with it.' Rogozinski founded wallstreetbets in 2012, but said Reddit ousted him as a moderator in 2020. His bid to sue the social media company for trademark infringement was dismissed by the US court of appeals for the ninth circuit last month. The forum's users home in on stocks and share their own research. 'It's a decentralization of power of who can be financial analyst,' said Noor Al, a moderator on wallstreetbets. 'Great ideas can now come from anyone, anywhere. 'We're seeing the power of retail push stocks, sometimes to the tune of billions of dollars, through the power of ideas, the power of community and the power of the people,' he added. The meme-stock craze of 2021, which produced stars such as Roaring Kitty, was a product of the Covid era, when many amateur traders were stuck at home and flush with pandemic stimulus cash. Whether this latest frenzy produces similar winners is not yet clear. Kohl's finished the week up 32%, GoPro was up 66% and Krispy Kreme was up 41%. The rallies show some investors are willing to take on more risk, as stocks scale record highs and the market, dominated by big tech, becomes harder to beat. Often, meme-stock bets are unbound from economic fundamentals, as investors move to support a brand for romantic or ideological reasons. Donald Trump's Trump Media & Technology Group, home to Truth Social, is valued at more than $5bn on quarterly revenue of about $1m. The wallstreetbets ethos 'has always to some extent been about flaunting and exploiting the ironies, relevance or irrelevance' of the stock market, said Rogozinski, who pointed to Wendy's, the hamburger chain, as a good example. 'Wendy's has always been a meme that goes back a decade. It brings a smile to my face, because on Reddit there's always been this thing where they say: 'Sir, this is a Wendy's.' 'It's an inside joke, and I don't even get where it started. It's just a meme,' he added. The stock's fleeting rise – it rallied 10% in two days, but finished the week broadly flat – shows some retail investors do not necessarily care about the typical factors that drive the market, such as tariffs and war in the Middle East. 'It's this ability for us to almost make fun of the financial system.' Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Long-term institutional players will always get the last laugh, Rogozinski conceded, because prices will return to normal valuations. 'But in the short term there's lot of money to be had with this volatility, and the fact that stocks are able to move up and down with such ease is but a mere showcase for how the financial system needs a facelift in relevancy.' While current market conditions do not replicate the low interest rates and retail investor buoyancy of the Covid era, market records and a robust economy have made meme stocks attractive once again for some. 'You see all these indications where this is full-blown meme mania,' Brent Kochuba, founder of derivatives-data firm SpotGamma, told Bloomberg. 'The macro economic environment really favors the retail and speculative plays,' agreed Al. 'I think were only going to see more speculation and excitement. It's a good time to tune in, because retail players can react and provide insight faster.' Days traders are not necessarily bothered by a company's financial performance, said Rogozinski. 'You have this activist, elective investor who is saying, 'I don't care what the financial statements look like, I don't care what the discounted cashflow is, I like the food, I like the video-game store, I like the meme. So dude, you can go back to Excel spreadsheets if you want, but I really like the chicken tenders,'' he said. There is now a 'third component' to investment, beyond supply and demand, he claimed, 'which is, 'dude, I don't care if you think it's going to go up or not, or if they have assets or liabilities. I care about this company and I'm going to help it out. I'm going to go buy my jeans from American Eagle.''
