Kohl's shares surge 37% in meme stock frenzy

In the United States, Kohl's department store experienced a significant surge in its stock price on July 22, 2022, amid renewed interest in meme stocks by retail investors and online communities. Shares of the company, which faced declining revenue and increasing competition in the retail sector, saw their price more than double from a previous close of $10.42 per share during trading, although gains were later reduced after a temporary suspension of trading. Ultimately, Kohl's stock closed around 37% higher for the day, with trading volumes reaching over 184 million shares, nearly 17 times the average over the previous 30 days. This remarkable increase marked its largest daily percentage gain ever, surpassing the previous record of 36% set in January 2022. The trading frenzy was fueled by discussions and posts on social media platforms like Reddit, particularly among the WallStreetBets community, reminiscent of the notable GameStop short squeeze in 2021. With approximately 49.3% of Kohl's public float heavily shorted, the retail investors' pressure to buy shares drove prices higher, which in turn compelled short sellers to buy back shares to minimize their losses, creating a cycle that dramatically spiked the stock price. Throughout July, Kohl's shares have climbed over two-thirds, setting them on course to achieve a monthly gain that could surpass the previous record of 51.2% recorded in November 2020. Meanwhile, despite this stock market excitement, Kohl's has been grappling with significant business challenges, including declining net sales and a leadership crisis, as its prior CEO was ousted due to a conflict-of-interest scandal. The future of the retailer remains uncertain as it continues to face pressures within the competitive retail landscape, including a forecast for declining sales for the full year.