Here’s How Kohl’s and Krispy Kreme Became Part of the Latest Meme Stock Frenzy

On July 21, 2025, stunned investors watched as four downtrodden stocks — Krispy Kreme, Opendoor, Rocket Companies, and Kohl's — suddenly surged in value. Dubbed the "DORK" stocks (after their ticker symbols), some doubled in price in just a day. But by July 23, much of that value had already vanished.

For many watching from the sidelines, the sudden spike sparked the urge to start investing. However, meme stocks continue to prove to be anything but a reliable investment.

Let's dive into meme stocks, what we learned from the recent surges in Kohl's and Krispy Kreme, and why chasing them can be as risky as it is thrilling.

What are meme stocks?

Meme stocks are shares of companies that experience significant increases in value due to excitement on social media, and price fluctuations can be substantial. These changes have very little, if any, connection to the company's business or financial health, which is why you can see such a substantial price swing in a matter of hours.

One of the biggest drivers of meme stocks is the Reddit community r/WallStreetBets. Here, community members drive excitement for "moonshots," or stocks that fall under the high-risk, high-reward category. They also celebrate "diamond hands," referring to individuals who refuse to sell, even under pressure.

The history of meme stocks

The meme stock frenzy originated in 2020, when commission-free trading apps like Robinhood made investing more accessible, and millions of people were stuck at home during the COVID-19 pandemic.

Most people remember GameStop as the meme stock that started it all. The retailer saw its stock skyrocket from $17.25 to over $500 in less than a month. The rally wasn't based on profits or new products, but on a coordinated buying push to squeeze hedge funds that had bet against the stock.

This frenzy led the Robinhood app to halt trading of the stock. The SEC also issued guidance to companies seeking to raise funds from future price fluctuations.

How do the prices increase so much?

Massive gains are usually driven by short interest. When big investors believe a stock will decline in value, they borrow shares and sell them. When the price drops, they repurchase the assets, reimburse the investors from whom they borrowed, and pocket the difference.

Retail investors take note of this. In some cases, they'll rush to buy shorted stocks. This increases the value of the shares. In turn, institutional investors who borrowed shares must repurchase them at a higher price.

This creates a cascading effect where big investors are forced to buy stocks to return them to the original lender.

What's the latest meme stock craze?

Like the GameStop frenzy of the past, increases in the DORK stocks are not based on fundamentals. However, the reasons for their respective jumps vary somewhat. While Reddit certainly remains a primary driver of the meme stock craze, there's a bit more to the DORK craze. This includes shout-outs from fund managers, positive corporate news, and the always famous "short interest."

Krispy Kreme (DNUT)

Nearly everyone loves a good Krispy Kreme donut. Unfortunately, you wouldn't know this from their profits. Because they have none. Literally. Still, the stock's value increased by 110% in the last two weeks of July, from $2.57 on June 25 to $5.44 by July 23.

This was driven entirely by online chatter of short interest. A full 28% of DNUT stocks were sold short when the frenzy started. Retail investors bought these up, forcing short investors to pay higher prices.

Opendoor (OPEN)

On June 25, real estate company Opendoor was trading at $0.51. By July 21, the stock jumped to $3.21, a 500% increase. The spark? A post on X (formerly Twitter) from hedge fund manager Eric Jackson, who gave the stock an eye-popping $82 price target.

This drove all the enthusiasm, and the penny stock suddenly became something more. By July 25, however, the stock had fallen under $2.

Rocket Companies (RKT)

One of the largest retail mortgage lenders in the U.S. found itself in the meme stock frenzy, as well. Rocket Companies, the owner of Rocket Mortgage, saw its stock price at $15 on June 25, but it jumped to $18 by August 5. Although it's a more modest jump, it's still a 20% increase worth noting, given the stagnant real estate market and the fact that Rocket is not earning any profit.

The increase was driven by discussion of short interest on Reddit. Unfortunately for investors, the price had dropped under $15 in just a week.

Kohl's (KSS)

The significant increase we saw in Kohl's was driven entirely by short interest and Reddit chatter. On June 25, the department store's stock was just over $8. By July 22, this had increased to $14.34, a 50% increase.

The rapid climb wasn't supported by earnings or business news, which means that by August 1, the hype had cooled and the stock settled above $10.

Bottom line

It's easy to get swept up in the excitement of meme stocks. Watching low-priced shares spike overnight can be thrilling, and online chatter often fuels the belief that bigger returns are just around the corner.

But the reality is that many of these rallies collapse just as quickly as they start. Although all investing carries risk, meme stocks are among the riskiest. If your goal is to build wealth, focus on companies with solid fundamentals rather than short-term online hype.

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