Opendoor, Kohl's resume rally as meme stock frenzy continues
Opendoor Technologies, an e-commerce platform for residential real estate, rose 19% to $2.73, adding to its more than 400% surge in July.
Bullish posts last week on X.com by EMJ Capital portfolio manager Eric Jackson helped ignite the rally.
'This is not a meme stock,' Jackson wrote Thursday. '$OPEN is a real platform with real cashflow potential. The only question is how fast we push it to full value.'
Struggling department store operator Kohl's, which joined the meme stock rally earlier in the week, jumped 10.5%. Donut chain Krispy Kreme (DNUT.O), opens new tab gained 1.5%, while action camera maker GoPro (GPRO.O), opens new tab edged up 0.3%.
"You're getting some of the meme trade," said Thomas Hayes, chairman at Great Hill Capital LLC in New York. "The big early move was a short squeeze and now this is residual short squeeze followed by people starting to come and chase the momentum."
Most of these companies are loss-making, making them targets for short sellers betting the shares will fall. However, retail traders often buy these cheaper stocks, sparking rapid rallies.
When this occurs, short sellers are forced to unwind positions in a phenomenon known as a short squeeze. LSEG data show most of these firms are heavily shorted.
Mom-and-pop traders bought GoPro (GPRO.O), opens new tab and Krispy Kreme (DNUT.O), opens new tab heavily on Wednesday, with Krispy Kreme seeing its biggest one-day inflow since May 2024.
The recent moves 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.
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