Latest news with #GameStop
Wall Street Journal
6 hours ago
- Business
- Wall Street Journal
The Meme-Stock Craze Comes to Kohl's
Shares of department-store chain Kohl's and real-estate platform Opendoor Technologies have rocketed higher recently. So have other oddball stocks, including Quantamscape, a maker of batteries for electric vehicles, and Rigetti Computing, a quantum-computing firm. Their recent rise—and the cult followings they have inspired on social media—are reminiscent of GameStop, AMC Entertainment and the original meme stocks that caught fire in the aftermath of the pandemic.
Yahoo
11 hours ago
- Business
- Yahoo
Kohl's Shares Shoot Up Over 105% as Meme Stock Dynamics Overwhelm Retail Issues
Kohl's Corp. on Tuesday went abruptly from beleaguered broadline retailer and beaten-down stock to the big gainer on Wall Street as traders took their cue from social media and dove in. Shares of Kohl's shot up as much as 105 percent to $21.39 shortly after the opening bell on Tuesday — enough that trading in the stock was briefly halted to cool the market down. More from WWD Kohl's Upping the Ante on Footwear During Critical Back-to-School Season Kohl's Narrows Q1 Net Loss, Beats Expectations Kohl's Plans Refinancing With $360M Offer of New Senior Secured Notes The stock settled at an increase of 37.6 percent to $14.34, leaving the company with a market capitalization of $1.6 billion. There was no corporate news driving the big run-up, but a confluence of market dynamics. Sixty-six percent of the stock's float was sold short as of the end of June, according to Yahoo Finance. That has two-thirds of the retailer's investors betting the stock will fall. But if the stock rises, short sellers will eventually have to take the loss and those losses grow as the stock goes higher, creating a rush for the exit as the short sellers are squeezed. Short squeezes can happen when a troubled company bounces back, catching doubters unawares. But Kohl's is also caught up in the world of meme trading, where investors on sites like Reddit rally around a name and sway the broader market. Shares of videogame retailer Game Stop famously rallied in 2021 as a grassroots campaign sought to squeeze out the shorts on the stock. For the company in question, meme stock bumps and short squeezes can be distracting, but have limited direct impact on operations. However, the episode does highlight the tough spot Kohl's is in as meme investors tend to go after weaker stocks where they can move the market. And Kohl's has been in something of a perpetual turnaround. Former chief executive officer Michelle Gass was dogged by activist investors before she left to take charge at Levi Strauss & Co. Tom Kingsbury stepped in for two years as CEO only to see his efforts fall flat. The next great hope, CEO Ashley Buchanan, was fired after three months in April, after engaging in vendor transactions with a romantic interest under unusual terms. Sales fell 4.1 percent in the first quarter and the company projected the top line would fall by 5 percent to 7 percent this year. Now Kohl's is looking to turn that trend around, find a permanent CEO and navigate tariffs and cautious consumers — all while ignoring a new kind of chaos in the stock market. Best of WWD Harvey Nichols Sees Sales Dip, Losses Widen in Year Marred by Closures Nike Logs $1.3 Billion Profit, But Supply Chain Issues Persist Zegna Shares Start Trading on New York Stock Exchange
CNBC
15 hours ago
- Business
- CNBC
Jim Cramer describes positive and negative forces that are shaping market action
According to CNBC's Jim Cramer, this market is hard to pin down. On Wednesday he described a fraught environment, highlighting both positive and negative themes that are driving the action. "It's mixed. Some good, some bad…When it gets all good, it will be too good. When it gets all bad, it'll be too bad," he said. "Maybe right now it's just right — and we should be skeptical, but not cynical, because there's too much money being made, and I don't want you to leave the table." Cramer mentioned President Donald Trump's trade deal with Japan. Trump announced Tuesday that he would implement 15% tariffs on Japanese imports and said the country would invest $550 billion into the U.S. Cramer noted that the new duty is less extreme than Trump's initial proposal and "something most businesses can live with." However, he suggested that the deal could be inflationary and discourage the Federal Reserve from cutting interest interest rates. Cramer said there are some strong themes that could see long-term success, including the data center. He noted that GE Vernova, an energy company that powers much of the new technology, indicated that demand for data center electrification is strong. Although he said there are some investors who are suspicious of the data center buildout and question whether the hyperscalers need so much computing power. Earnings season has been strong so far, Cramer continued, pointing to success from major banks and healthcare-related companies. Alphabet's quarter sent the stock climbing in extended trading on Wednesday, Cramer noted. While not all outfits are beating the estimates, he said the good outweighs the bad. However, he said there is "froth that feels like the market before the Great Recession hit in 2008, or the dot com period in 1999, or the SPAC and GameStop mania of 2021." He said there are some investors, including hedge funds, that are "up to speculative things that make my stomach, well, let's say, churn." He named recent buying action in legacy department store chain Kohl's, which has 50% short interest. He said the stock is not a safe short, as it's too cheap, and the company could still be acquired by a big buyer. "But away from Kohl's, we see things happening that if we had a tough SEC, well, we would be against. Many one and two and three dollar stocks are getting bagged, being gunned and, for all I know, being liquidated…for a quick win," he said. "I don't want to dignify them with a mention…but I would say that many of these should be investigated. It just doesn't seem right." Click here to download Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest The CNBC Investing Club Charitable Trust owns shares of GE Vernova and Alphabet.
CNBC
18 hours ago
- Business
- CNBC
How July's meme stock surge compares to 2021 — still a long way to go
Meme stock mania has reemerged along with summer blockbusters, but some strategists and traders warn that this latest round of speculation and animal spirits is unlikely to reach its 2021 heights. Online real estate startup OpenDoor Technologies became the public face of this month's meme stock rally after hedge fund manager Eric Jackson, an investor in the stock, began hyping it on the social media platform X . Reddit-obsessed day traders have also piled into shares of well-known, household names GoPro , Kohl's and Krispy Kreme . OpenDoor has soared 332% in July, GoPro has more than doubled and Krispy Kreme is ahead 50%. The recent fervor for small cap, low-priced stocks with high short interest marks the largest resurgence in meme stocks — promoted on social media and in online communities — since 2021's GameStop mania, Bespoke Investment Group said in a note on Tuesday. "As shown below, using an index of the 100 most heavily shorted stocks Russell 1,000 stocks versus the Russell 1,000 itself, the over 52% 3-month gain in the former has outperformed the broader Russell 1,000 by over 30 percentage points. At the peak less than a week ago, that most shorted index was up closer to 60% with an over 40 [percentage point] spread versus the Russell. That is the widest spread since the 2021 meme stock mania," Bespoke wrote. But this time around, the meme stock frenzy may prove short-lived — and fail to achieve the heights of 2021. While it's hard to pin an expiration date on when the frenzy might subside, some signs indicate that the meme stock rally may already be on its last legs, said Paul Hickey, Bespoke co-founder. "Just the fact that there's been a lot of focus on it would suggest that we're probably closer to the end of it than the beginning of these stocks going crazy," Hickey told CNBC in an interview. "Once things are well-covered like this, you tend to be in the later stages than the early stages." Goldman Sachs echoed that view in a Wednesday note. "We flagged the momentum rotation and extreme rally in high beta names and lower quality pockets of the market, and we may be moving towards later innings of the short covering given the magnitude of these moves," the Goldman trading desk wrote. Bespoke also pointed out that the stocks with the highest short interest as a percentage of float — a key metric for a meme stock — were among those that performed worse during the selloff from the February highs to the early April lows. But the April bottom, these stocks have conversely delivered outsized gains. "In other words, the most heavily shorted stocks were both those that were hit the hardest during the first quarter's sell-off, and those same stocks have rallied the most off the lows. Given those outsized rallies, valuations in this pocket have gotten lofty," the firm wrote. Hickey told CNBC that this activity made sense given that market rallies tend to coincide with easier credit conditions, and the biggest beneficiaries of these easing conditions tend to be the stocks with the "shakiest fundamentals." "During market rallies like we've been having, you tend to see the lower quality stocks performing better. And some of these meme stocks tend to be the stocks that have the highest valuations and weaker fundamentals," he said. "Whereas during that period earlier in the year, from mid-February till early April, that was a weak market environment. And conversely, in weak market environments, the lower quality stocks tend to do worse."
CNBC
a day ago
- Business
- CNBC
Stocks making the biggest moves midday: GE Vernova, Texas Instruments, Krispy Kreme and more
Check out the companies making headlines in midday trading: GE Vernova — Shares jumped 14% as strong power demand outweighed the impact of President Donald Trump's tariffs. GE Vernova has raised its full-year guidance after a strong first half and said the tariff impact will likely come in at the low end of $300 million to $400 million. GoPro , Krispy Kreme — Reddit-obsessed retail traders found their new targets Wednesday, pushing up shares of wearable camera firm GoPro and doughnut maker Krispy Kreme by 21% and 8%, respectively. The so-called short squeeze could be at play as they both have elevated levels of short interest. The two stocks are heavily cited on WallStreetBets , the online forum behind the infamous GameStop mania in 2021. Lamb Weston — The french fry producer surged 16% after reporting a fiscal fourth-quarter earnings and revenue beat. Lamb Weston posted adjusted earnings of 87 cents per share on revenue of $1.68 billion, exceeding the earnings of 63 cents per share and $1.59 billion revenue analysts had expected, per FactSet. The company also introduced a cost-savings program aiming to deliver at least $250 million in annualized run rate savings by the end of fiscal year 2028. Fiserv — Shares plummeted 15% after the fintech company lowered its full-year organic revenue guidance to growth of around 10%, whereas previously the company was expecting growth in the range of between 10% to 12%. However, Fiserv reported second-quarter adjusted earnings and revenue that beat analyst estimates, according to FactSet. The company also announced it would acquire part of TD Bank's merchant processing business in Canada. Otis — Shares of the elevator maker fell 10% after the company lowered its revenue forecast on the expectation that there will be weak demand for new equipment. The company now expects annual sales to be in the range of $14.5 billion to $14.6 billion, down from a prior estimate of $14.6 billion to $14.8 billion. Lennox International — The maker of climate control solutions saw its shares rise 9% after boosting earnings expectations for the full year. Lennox now predicts earnings of $23.25 to $24.25 a share for the year, up from a prior range of $22.25 to $23.50 per share. Texas Instruments — The chip stock dropped more than 11% after the firm released a third-quarter forecast that missed estimates. The semiconductor company did report second-quarter results that beat analysts' expectations for revenue and earnings, however. Hilton Worldwide — The hotel stock slipped 2% despite Hilton posting a second-quarter earnings and revenue beat. Hilton reported adjusted earnings of $2.20 per share on revenue of $3.14 billion, while analysts polled by LSEG had expected earnings of $2.04 a share and $3.10 billion in revenue. The company also raised its full-year earnings guidance to between $7.83 and $8.00 per share, versus its prior range of between $7.76 and $7.94 a share. SAP — U.S.-listed shares of the enterprise software company fell more than 4%. The company posted 9.03 billion euros for second-quarter revenue, missing the LSEG consensus estimate of 9.08 billion euros. Enphase Energy — The solar stock dropped about 15% after the firm issued third-quarter revenue guidance that came below Wall Street estimates. Enphase said tariffs had affected its gross margin. — CNBC's Yun Li, Spencer Kimball, Alex Harring, Lisa Han and Fred Imbert contributed reporting.
