For Kohl’s Corp. shareholders, July 22 might be a day that lives with them for a long time.
On that day, the price of Kohl’s stock nearly doubled just after the market opened, jumping from about $10.41 to nearly $20. For those who sold early, it was a good day.
The stock did come down from the peak of the day, but the price was still considerably higher than where it closed. And all of this came without any news from the company — which has been struggling in recent years — stirring action from investors.
If you’re an employee with shares, regular investor or curious person, what does this mean?
Here’s what to know about a very unusual day for the Menomonee Falls-based retailer.
What happened with Kohl’s stock July 22?
The stock went bonkers nearly doubling its price. Reuters reported trading was temporarily halted.
Why did Kohl’s share price increase so quickly?
There isn’t an easy answer to this question. However the forum WallStreetBets on Reddit, which is a place where day traders share information and tips online, were talking a lot about the stock as the frenzy ensued.
But there isn’t a specific reason why July 22 was the day for the stock to go “to the moon” — to use Reddit lingo.
How much trading took place in Kohl’s shares compared with a regular day?
On a regular day, roughly 8.7 million shares of Kohl’s stock is traded. But on July 22, more than 200 million shares were bought and sold.
What do experts say is happening with Kohl’s stock?
Before the stock price went up, there was a large “short” position against the company, meaning there are a lot of people betting against Kohl’s stock.
David Swartz, analyst with Morningstar, who monitors Kohl’s, said momentum has been building for Kohl’s to see a higher price since the stock was down to just about $6 in April and moving steadily up to about $10 in July.
“It has been building from its lows and people started promoting it online,” Swartz said of online day traders. “They’re buying it because other people are buying… and they think they can start a short squeeze and that’s what’s happening.”
What is a meme stock?
Essentially a “meme stock” is a publicly traded company that is trading at a relatively low price that becomes popular online and generates a lot of trading activity.
The online part is crucial to the meme stocks. Places like WallStreetBets on Reddit have become a gathering place online for people to talk about the market and which stocks to buy.
For example, headphone maker Koss Corp. became a meme stock in 2021 when its stocked jumped from about $2.50 to $66 per share. Then lightning struck again for Koss at the stock rose 177% in 2024.
How do the changes in Kohl’s stock affect average investors?
If an investor sold their shares when Kohl’s stock was near $20 it’s possible they could have made money — depending on the price they paid for their shares.
During the company’s most recent quarterly call with investors and analysts, Kohl’s reported a 4.1% sales decrease, continuing a streak of quarterly sales decreases that has started more than two years ago. The company is also expecting a net sales decrease between 5% and 7%.
What does it mean to ‘short’ a stock like Kohl’s?
Roughly 50% of the stocks being trades on Kohl’s are shorts, meaning it’s a bet against the company. When the stock goes down, those with a short position make money. If the stock goes up, those with a short position lose money.
This is another component, although not a requirement, for meme stocks. Typically a company with large short positions against it attract online followers anxious to see if they could drive up the price to cause the companies and traders with short positions to lose money.
“The goal is to try to get a lot of people to buy this stock today,” Swartz said of the online buzz about Kohl’s. “Throughout the day there are people who are taking gains and losses… I’m sure some of them gave up today and covered their shorts.”
How long can this go on for?
This is another difficult question to answer as we’re in the middle of it. But to use Koss as an example, shares were trading at less than $3 before the stock shot up to more than $60 per share in 2021.
It took roughly two years for Koss stock to slide down to under $3.
In 2024, Koss stock was trading at just under $4 when it rose to more than $13 per share and it has yet to come back down to under $4.
Which is part of the reason people are drawn to meme stocks — there isn’t a set date for it to expire.
“If they could push it up to $20 one day they could do it another day,” Swartz said.
This article originally appeared on Milwaukee Journal Sentinel: Kohl’s is a ‘meme stock’ ignited by online investors. A huge number of shares changed hands.
Reporting by Ricardo Torres, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel
USA TODAY Network via Reuters Connect
