As the stock market climbs to new heights and valuations soar, bargain-hunting investors are once again turning their attention to Wall Street’s underperformers.
The latest entrants in the meme stock frenzy include Krispy Kreme, GoPro and Beyond Meat – all rallying Wednesday despite ongoing struggles with profitability. Their surge comes as recent favorites such as department store Kohl’s and online real estate firm Opendoor Technologies tumble after several days of sharp gains, underscoring how quickly sentiment can shift in the meme stock arena.
Meme stocks are typically fueled more by viral buzz than by financial fundamentals. These are stocks that catch fire on social media platforms and trading forums, with GameStop and BlackBerry’s dramatic rises in 2021 serving as textbook examples.
Often, meme stocks are initially the target of short sellers – investors betting against the stock. If other investors start buying the shares and boost the price, it could prompt those betting against the stock to buy more shares to cushion their own losses.
Krispy Kreme rose 9% Wednesday, adding to its 26.7% gain a day earlier. The company has seen several years of falling profits and revenue. Wall Street expects it to post a loss for 2025. During its last earnings update, the company pulled its financial forecast for the year as it reassesses its partnership with McDonald’s.
GoPro jumped 35% Wednesday, following its 41% gain Tuesday. The company last posted an annual profit in 2022, and revenue has been sliding for several years as it faces more competition in a smartphone camera market it once dominated. Wall Street is forecasting the company will eke out a slight profit in 2025.
Beyond Meat gained 9% Wednesday and is now up more than 30% for the week. The company has been struggling for years and has yet to notch an annual profit since going public in 2019. It warned in its latest earnings update that it is “experiencing an elevated level of uncertainty” and pulled its financial forecasts for 2025.
Investors who buy now are betting that the momentum will continue – but it can shift suddenly.
Kohl’s, which operates 1,600 stores across the country, reversed course Wednesday and slipped about 16%, though it is still up about 36% this week. It is wrestling with a number of challenges, including a revolving door of CEOs and weak sales.
Opendoor Technologies shares also faded, falling 25% and giving back all of this week’s gains. The stock nearly tripled last week. Its recent gains came after hedge fund manager Eric Jackson touted the stock on X. Opendoor faces a tough housing market, with soaring interest rates and a low supply of homes making purchases and sales difficult for both buyers and sellers.
The original meme stock is video game retailer GameStop. In 2021, the company was struggling to survive amid the switch from discs to digital downloads, and major investors were betting against it. Investor Keith Gill, better known as “Roaring Kitty,” rallied others to join him in buying up thousands of GameStop shares, changing the stock’s trajectory.
GameStop had been trading under $5 heading into 2021. The stock was trading around $24.20 on Wednesday.
The initial meme stock craze eventually fizzled out, but the frenzy occasionally reignites – as seen over the past few years with sudden gains for BlackBerry, Bed Bath & Beyond and Chewy.
It took just four weeks in 2021 for GameStop’s stock to go from less than $5 to more than $120. But it has yet to reach that price again. BlackBerry quickly jumped from under $7 to nearly $30 in early 2021, but the gains were short-lived and trimmed back within a year. It is now trading at about $4.
