Wall Street defines a meme stock as one primarily driven by social media hype.
As the stock market pushes into record territory and bargains become harder to find, investors are once again turning to some of Wall Street’s beaten down companies in hopes of a quick score.
The latest so-called meme stocks are the department store Kohl’s, which has surged this week, and the online-based real estate company Opendoor Technologies, which has skyrocketed this month. Both companies have been struggling in their respective sectors.
Wall Street defines a meme stock as a stock that gains significant popularity and trading volume, primarily driven by social media hype and online communities, rather than the company’s fundamental financial performance. Think GameStop and AMC Entertainment in 2021, and a few subsequent instances.
Often, meme stocks are initially the target of “short sellers,” or investors betting against the stock. If other investors start buying the shares and boost the price, that could prompt the people betting against the stock to buy more shares to cushion their own losses.Kohl’s
Kohl’s, which operates 1,600 stores across the country, has risen almost 50% this week. It is wrestling with a number of challenges including a revolving door of CEOs and weak sales.
In May, it announced it had terminated its new CEO Ashley Buchanan after an investigation determined that he directed the retailer to engage in vendor transactions that involved undisclosed conflicts of interest.
