Kohl’s Stock Surges. It’s the Newest Meme Play.

Kohl’s stock opened Tuesday almost 90% higher than Monday’s close, with a trading volume 222% higher than its average 90-day volume. Welcome to the new meme stock. (Justin Sullivan/Getty Images)

The level of short interest in Kohl’s shares, at nearly 50%, has finally caught the attention of retail traders, setting the discount retailer up to become the market’s newest meme stock.

The stock traded up as much as 105% Tuesday morning, triggering a temporary halt in trading immediately following the open, likely driven by increased activity among retail investors.

The shares opened at $19.75, up 90% from Monday’s close. Trading volume was at 23.63 million shares, 222% higher than the average for the past 90 days and 404% above the five-year daily average, according to Dow Jones Market Data.

The surprising new interest in the shares triggered a market safeguard mechanism called a limit up-limit down pause, which is designed to curb excessive volatility.

Kohl’s stock was up 35% at $14.05 in late morning, after trading resumed.

With just under 50% of the company’s stock float sold short, Kohl’s is the most heavily shorted stock in the U.S., according to S&P Global Market Intelligence. That makes it a perfect target for a so-called short squeeze.

A short squeeze occurs when the price of a heavily shorted stock surges unexpectedly, forcing the investors who sell the stock short to buy more shares to limit their losses. That buying drives the price even higher in a self-reinforcing loop.

In recent years, short squeezes have been driven by the meme-stock trade—retail investors coordinating on social-media platforms such as Reddit and Stocktwits to buy the stock and drive up the price. Indeed, page views and message volume for Kohl’s stock began to spike Monday, rising to 10 times the previous 30-day average, Tom Bruni, editor in chief and vice president of community at Stocktwits, told Barron’s via email. Retail investor sentiment on Kohl’s turned to “extremely bullish” from “bullish” on the site, according to Stocktwits.

“Overall, this move is being driven more by momentum traders targeting heavily-shorted stocks than it is by long-term investors,” Bruni wrote.

A Kohl’s spokeswoman didn’t immediately respond to a request for comment.

The meme-stock trading frenzy has seen a revival in recent weeks, led by interest in real-estate tech company Opendoor Technologies. The stock has surged 96% this year to $3.14, but was down about 2.5% Tuesday morning.

The rally in both stocks and cryptocurrencies since early April has pushed retail traders “further out on the risk spectrum,” Bruni said. His data suggest that a little over a quarter of all trading volume in 2025 has been in names trading for less than $5, topping pandemic-era interest levels in beaten-down stocks.

Whether this is a positive for Kohl’s in the long run depends on whether Kohl’s can capitalize on the new interest by issuing shares or debt to raise capital, Bruni said. GameStop is an example of how a company can benefit.

The videogame retailer raised a little over $1 billion in a stock sale a few months after the meme-stock trading frenzy began in 2021. It used the proceeds to shore up its balance sheet and fund turnaround efforts.

But all meme stocks aren’t equal. While GameStop was able to harness the retail enthusiasm, others haven’t been as successful. Even the meme-stock trade couldn’t save Bed Bath & Beyond from declaring bankruptcy in 2023.

Write to Sabrina Escobar at sabrina.escobar@barrons.com