Yesterday, shares of medium-sized retailer Kohl’s Corp. (NYSE: KSS | KSS Price Prediction) rose over 100% at the open to over $21. They almost immediately crashed to $14, after trading below $10 the day before. Kohl’s financials have been mediocre. “I’ve been seeing signs of a ‘flight to crap’ recently,” Steve Sosnick, chief strategist at Interactive Brokers told Bloomberg.
Anyone who knew to sell Kohl’s immediately after the run-up made a fortune. Those who bought at above $20 were crushed. The move in and out of the stock was extraordinary. It usually trades 12 million shares a day. Yesterday, it traded 208 million. That’s twice what Tesla Inc. (NASDAQ: TSLA) trades in a day, and Tesla usually is the most widely traded stock on any exchange.
The huge swing in the Kohl’s share price is largely harmless, except for to thousands of people who lost money. The federal government does not care. The SEC or other agency did not intervene.
In the most recent quarter, Kohl’s revenues were down fractionally to $3.1 billion. Per-share earnings of ($0.13) compared to ($0.24) the year before. Michael Bender, Kohl’s interim chief executive officer, could do little more than thank his employees.
Meme Stocks Are Poison?
Meme stocks are good to trade for people who have a portfolio with some room for losers. For everyone else, they are a sort of poison.
There have been meme stocks before. These are stocks that move fast based on social media posts. Most experts trace the massive volatility and volume in the trading of stocks to January 2021. GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings Inc. (NYSE: AMC) were early stocks with meme status. Traders could move to the stocks quickly due to commission-free trading on Robinhood. Short-selling hedge funds tried to front-run the trades. Since professional traders rarely disclose their results, it is hard to say how many have made money.
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