Meme stocks unleashed: Analysing trends and risks in a changing market
05 August 2025
Matthew Chessum, director of securities finance, ETF, and Benchmarking Services at S&P Global Market Intelligence, reviews the meme stock phenomenon
Image: Shutterstock
As global markets reach all-time highs, the phenomenon of meme stocks has resurfaced, capturing the attention of retail investors once again. In a climate where traditional valuations often seem disconnected from economic realities, stocks like Kohl’s, Opendoor Technologies, and QuantumScape have emerged as modern representatives of this unique trading movement. Over the past few weeks, the revival of meme stocks and a renewed wave of retail investor enthusiasm have been influencing the market.
The resurgence of meme stocks
Meme stocks, defined by their rapid price movements driven primarily by social media buzz rather than fundamental performance, are making a strong comeback. The initial craze, which peaked with companies like GameStop and AMC Entertainment, showcased the power of retail investors banding together to challenge institutional short sellers.
As the global economy grapples with challenges such as inflation, supply chain disruptions, and geopolitical tensions, the allure of meme stocks has rekindled, offering a sense of community and rebellion against traditional market dynamics.
Kohl’s has recently become a focal point for retail traders, with its stock soaring nearly 50 per cent and reaching intraday highs of over 105 per cent. This surge can be attributed to high short interest, which stands at around 49.3 per cent of its public float.
Additionally, the company is facing CEO turmoil, having recently fired its third CEO in three years due to conflict-of-interest issues. Struggling fundamentals, including weak sales and fierce competition from giants like Amazon and Walmart, have made Kohl’s a prime target for speculative trading.
The massive trading volume — 184 million shares compared to an average of 9 million — suggests a classic short squeeze and highlights the herd mentality driving investor behaviour.
Short squeeze dynamics
The mechanics of a short squeeze remain a critical component of the meme stock narrative. A short squeeze occurs when a heavily shorted stock experiences a rapid price increase, forcing short sellers to cover their positions and exacerbating the price rise. Retail investors leverage social media platforms to coordinate buying efforts, amplifying the potential for dramatic price movements.
Opendoor Technologies is another stock experiencing significant momentum, with shares up over 500 per cent in July, despite being far below their 2021 peak of US$35.88 (currently around US$2.81).
The recent surge has been fuelled by social media hype, particularly from hedge fund manager Eric Jackson on X (formerly Twitter), as well as a frenzy of options trading that has seen more Opendoor options traded recently than even Nvidia’s. With 21.4 per cent of its float shorted, Opendoor is benefiting from a momentum-driven rally propelled by retail investors.
Figure 1: Opendoor Technologies - % outstanding shares on loan vs price
QuantumScape, while not currently in the spotlight like Kohl’s and Opendoor, has historically attracted attention as a meme stock due to its solid-state battery technology and volatile price swings. Although there is no major meme-driven surge reported in July 2025, QuantumScape remains a watchlist candidate for retail traders due to its speculative nature and high short interest.
Market conditions fuelling revival
The current economic environment plays a significant role in the resurgence of meme stocks. With traditional valuations reaching new heights, many investors are questioning the sustainability of these prices.
The uncertainty surrounding inflation, interest rates, and global economic stability has led some retail investors to seek alternative investment strategies, including meme stocks. This shift reflects a broader sentiment of defiance against conventional market wisdom.
The recent trading surges in stocks like Kohl’s and Opendoor highlight the growing acceptance of meme stock trading as a legitimate strategy among retail investors. The willingness to engage in high-risk, high-reward investments underscores a changing mindset, where community sentiment and social media influence take precedence over traditional financial metrics.
Managing risk with data insights
To successfully navigate the complexities of the meme stock landscape, investors can benefit from utilising data on short squeeze risk and securities finance metrics. Understanding short interest levels, the availability of shares for borrowing, and stability of supply can provide critical insights into potential price movements.
S&P Global Market Intelligence offers valuable metrics that help investors assess short squeeze risks, including securities finance fees, on-loan values, and a short squeeze scoring system that seeks to identify when short sellers of particular stocks may be facing capital constraints.
By monitoring these indicators, investors can gain a clearer picture of market dynamics, identifying when a stock is ripe for a short squeeze or when the borrowing costs may become prohibitive.
Final thoughts
The revival of meme stocks in the current market landscape underscores a unique intersection of investor sentiment, economic challenges, and social media influence. As stocks like Kohl’s, Opendoor Technologies, and QuantumScape capture the imagination of retail traders, the dynamics of short squeezes and community-driven trading are once again at the forefront of market discussions.
In an environment marked by uncertainty and high valuations, meme stocks offer a sense of empowerment and engagement for retail investors seeking to navigate the current financial landscape. By leveraging data insights and understanding the interplay between market conditions, community sentiment, and trading strategies, investors can better position themselves to capitalise on the revival of meme stocks while effectively managing risk.
The resurgence of meme stocks
Meme stocks, defined by their rapid price movements driven primarily by social media buzz rather than fundamental performance, are making a strong comeback. The initial craze, which peaked with companies like GameStop and AMC Entertainment, showcased the power of retail investors banding together to challenge institutional short sellers.
As the global economy grapples with challenges such as inflation, supply chain disruptions, and geopolitical tensions, the allure of meme stocks has rekindled, offering a sense of community and rebellion against traditional market dynamics.
Kohl’s has recently become a focal point for retail traders, with its stock soaring nearly 50 per cent and reaching intraday highs of over 105 per cent. This surge can be attributed to high short interest, which stands at around 49.3 per cent of its public float.
Additionally, the company is facing CEO turmoil, having recently fired its third CEO in three years due to conflict-of-interest issues. Struggling fundamentals, including weak sales and fierce competition from giants like Amazon and Walmart, have made Kohl’s a prime target for speculative trading.
The massive trading volume — 184 million shares compared to an average of 9 million — suggests a classic short squeeze and highlights the herd mentality driving investor behaviour.
Short squeeze dynamics
The mechanics of a short squeeze remain a critical component of the meme stock narrative. A short squeeze occurs when a heavily shorted stock experiences a rapid price increase, forcing short sellers to cover their positions and exacerbating the price rise. Retail investors leverage social media platforms to coordinate buying efforts, amplifying the potential for dramatic price movements.
Opendoor Technologies is another stock experiencing significant momentum, with shares up over 500 per cent in July, despite being far below their 2021 peak of US$35.88 (currently around US$2.81).
The recent surge has been fuelled by social media hype, particularly from hedge fund manager Eric Jackson on X (formerly Twitter), as well as a frenzy of options trading that has seen more Opendoor options traded recently than even Nvidia’s. With 21.4 per cent of its float shorted, Opendoor is benefiting from a momentum-driven rally propelled by retail investors.
Figure 1: Opendoor Technologies - % outstanding shares on loan vs price
QuantumScape, while not currently in the spotlight like Kohl’s and Opendoor, has historically attracted attention as a meme stock due to its solid-state battery technology and volatile price swings. Although there is no major meme-driven surge reported in July 2025, QuantumScape remains a watchlist candidate for retail traders due to its speculative nature and high short interest.
Market conditions fuelling revival
The current economic environment plays a significant role in the resurgence of meme stocks. With traditional valuations reaching new heights, many investors are questioning the sustainability of these prices.
The uncertainty surrounding inflation, interest rates, and global economic stability has led some retail investors to seek alternative investment strategies, including meme stocks. This shift reflects a broader sentiment of defiance against conventional market wisdom.
The recent trading surges in stocks like Kohl’s and Opendoor highlight the growing acceptance of meme stock trading as a legitimate strategy among retail investors. The willingness to engage in high-risk, high-reward investments underscores a changing mindset, where community sentiment and social media influence take precedence over traditional financial metrics.
Managing risk with data insights
To successfully navigate the complexities of the meme stock landscape, investors can benefit from utilising data on short squeeze risk and securities finance metrics. Understanding short interest levels, the availability of shares for borrowing, and stability of supply can provide critical insights into potential price movements.
S&P Global Market Intelligence offers valuable metrics that help investors assess short squeeze risks, including securities finance fees, on-loan values, and a short squeeze scoring system that seeks to identify when short sellers of particular stocks may be facing capital constraints.
By monitoring these indicators, investors can gain a clearer picture of market dynamics, identifying when a stock is ripe for a short squeeze or when the borrowing costs may become prohibitive.
Final thoughts
The revival of meme stocks in the current market landscape underscores a unique intersection of investor sentiment, economic challenges, and social media influence. As stocks like Kohl’s, Opendoor Technologies, and QuantumScape capture the imagination of retail traders, the dynamics of short squeezes and community-driven trading are once again at the forefront of market discussions.
In an environment marked by uncertainty and high valuations, meme stocks offer a sense of empowerment and engagement for retail investors seeking to navigate the current financial landscape. By leveraging data insights and understanding the interplay between market conditions, community sentiment, and trading strategies, investors can better position themselves to capitalise on the revival of meme stocks while effectively managing risk.
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