To The Moon

The meme stock frenzy is back, and it’s a wild ride. GoPro (GPRO) and Krispy Kreme (DNUT) have skyrocketed overnight, with GoPro surging up to 73% before closing 12.4% higher and Krispy Kreme popping 39% at its peak before ending up 4.6%. Meanwhile, Opendoor (OPEN) plummeted 20% on July 23, 2025, after a 500% monthly surge, and Kohl’s (KSS) shed 14.2% after doubling earlier in the week. This rapid rotation, driven by retail investors and social media hype, has investors buzzing: Should you dive into this speculative chaos, or steer clear? Is targeting the most shorted stocks a winning strategy? This report dives into the meme stock rollercoaster, analyzes the drivers behind these moves, and outlines strategic approaches to navigate this volatile market while managing risks.

The Meme Stock Rollercoaster

Meme stocks, defined by their popularity on social media platforms like Reddit’s WallStreetBets rather than fundamental financial performance, are known for their explosive volatility. The latest wave, peaking on July 23, 2025, showcases this dynamic:

• GoPro (GPRO): The wearable camera maker’s stock soared as much as 73% during Wednesday’s session, closing up 12.4% at $2.26. Trading volume hit 56,000 call contracts, the highest since 2021, per Bloomberg.

• Krispy Kreme (DNUT): The doughnut chain’s shares surged 39% at their session high, closing up 4.6% at $4.28, with a record 151 million shares traded, 71 times the average daily volume, per Reuters.

• Opendoor (OPEN): After a 500% surge since early July, driven by a viral X thread from hedge fund manager Eric Jackson, the real estate platform’s stock crashed 20% to $14.40 on Wednesday, per CNBC.

• Kohl’s (KSS): The department store’s shares, which doubled on Monday, fell 14.2% to $34.20 on Wednesday, reflecting a shift in retail investor focus, per The Globe and Mail.

These moves highlight the rapid rotation typical of meme stocks, where new favorites like GoPro and Krispy Kreme replace fading stars like Opendoor and Kohl’s.

Drivers of the Frenzy

Several factors fuel these wild swings:

• High Short Interest: GoPro (10% of float shorted) and Krispy Kreme (28% shorted) are prime targets for short squeezes, where retail buying forces short sellers to cover, driving prices higher, per FactSet.

• Social Media Hype: Platforms like Reddit and X amplify sentiment, with WallStreetBets posts sparking coordinated buying. Opendoor’s surge was fueled by a viral X thread, while GoPro and Krispy Kreme gained traction on Reddit, per CNBC.

• Retail Investor FOMO: With the S&P 500 at 6,263.26 and Nasdaq at 21,000, a risk-on market environment encourages retail traders to chase high-volatility plays, per Nationwide’s Mark Hackett.

• Market Dynamics: The 2025 meme stock rally echoes 2021’s GameStop and AMC mania, driven by low interest rates, high liquidity, and proposed day-trading rule relaxations, per Business Insider.

However, the lack of fundamental catalysts—GoPro’s Q1 2025 revenue fell 13% to $134.3 million, and Krispy Kreme struggles with profitability—makes these rallies speculative and prone to reversals.

Should You Trade Meme Stocks?

Trading meme stocks can be tempting due to their potential for quick gains, but the risks are substantial:

• Pros:

  Explosive Returns: GoPro’s 73% intraday surge and Opendoor’s 500% monthly gain show the potential for rapid profits.

  Liquidity: High trading volumes (e.g., Krispy Kreme’s 151 million shares) make it easier to enter and exit positions.

• Cons:

  Extreme Volatility: Opendoor’s 20% drop and Kohl’s 14.2% decline highlight how quickly gains can vanish.

  Lack of Fundamentals: Meme stocks are driven by sentiment, not financial health, making them unpredictable.

  Herding Risk: Once retail interest fades, prices can collapse, as seen with Opendoor and Kohl’s.

If you trade meme stocks, limit exposure to 5-10% of your portfolio, use tight stop-losses, and monitor social media for sentiment shifts. Only risk capital you can afford to lose.

Targeting Most Shorted Stocks: A Viable Strategy?

High short interest is a hallmark of meme stocks, as it creates conditions for short squeezes:

• Why It Works: Stocks like Krispy Kreme (28% shorted) and GoPro (10% shorted) are attractive because retail buying can force short sellers to cover, amplifying price surges.

• Limitations: Not all highly shorted stocks become meme stocks. Success depends on social media traction and retail momentum, which are hard to predict.

• Strategy Tips: Use tools like FactSet to identify stocks with high short interest (e.g., >20% of float), but cross-reference with social media platforms like Reddit’s WallStreetBets or X for signs of retail interest. High trading volume and call option activity are key indicators.

While targeting shorted stocks can uncover potential meme stock candidates, it’s not a guaranteed strategy. Timing and sentiment are critical drivers.

Key Stocks to Watch

• GoPro ( $GoPro(GPRO)$ ): Up 50% YTD, with a 12.4% gain on July 23. Targets $2.50, with support at $2.00.

• Krispy Kreme ( $Krispy Kreme, Inc.(DNUT)$ ): Up 30% YTD, with a 4.6% gain on July 23. Targets $5.00, with support at $4.00.

• Opendoor ( $Opendoor Technologies Inc(OPEN)$ ): Up 200% YTD, but down 20% on July 23. Targets $18.00, with support at $12.00.

• Kohl’s ( $Kohl's(KSS)$ ): Up 40% YTD, but down 14.2% on July 23. Targets $40.00, with support at $30.00.

• Beyond Meat ( $Beyond Meat, Inc.(BYND)$ ): Up 25% YTD, emerging as a new meme stock. Targets $8.00, with support at $6.00.

Trading and Investment Strategies

Short-Term Plays

• Buy GoPro on Dip: Enter at $2.00-$2.10, target $2.50, stop at $1.90. A 19-25% gain if retail momentum persists.

• Buy Krispy Kreme on Dip: Grab at $4.00-$4.10, target $5.00, stop at $3.80. A 22-25% gain on short squeeze potential.

• Options Straddle: Buy $2.26 calls/puts on GPRO or $4.28 calls/puts on DNUT for volatility, targeting 200-300% gains if stocks move 10%+.

• Fade Opendoor: Short at $14.40-$15.00, target $12.00, stop at $16.00, for a 17-20% gain if selling pressure continues.

Long-Term Investments

• Hold Tech ETF (XLK): Buy at $200, target $220, stop at $190, for stable tech exposure to balance meme stock volatility.

• Hold Consumer Staples (XLP): Buy at $80, target $85, stop at $75, for defensive stability with a 2.5% yield.

• Hold NVIDIA (NVDA): Buy at $160-$165, target $200-$210, for 22-27% upside with AI growth.

• Diversify with S&P 500 ETF (SPY): Buy at $614, target $650, stop at $600, for broad market exposure.

Hedge Strategies

• VIXY ETF: Buy at $15, target $18, stop at $13, to hedge against tariff or market volatility.

• SPY ETF Puts: Use puts at $614 to protect against a 5-10% S&P 500 pullback.

• Gold ETF (GLD): Buy at $200, target $220, stop at $190, as a safe-haven hedge.

My Trading Plan

I’m cautiously intrigued by the meme stock frenzy but recognize its high risks. I’ll trade GoPro at $2.00-$2.10, targeting $2.50, with a $1.90 stop, and Krispy Kreme at $4.00-$4.10, targeting $5.00, with a $3.80 stop, limiting exposure to 5% of my portfolio. For stability, I’ll add XLK at $200, targeting $220, with a $190 stop. I’m hedging with VIXY at $15, targeting $18, and keeping 20% cash to seize dips if tariffs (30% on EU/Mexico, 35% on Canada) or geopolitical tensions (Israel-Iran conflict) escalate. I’ll monitor Reddit, X, and trading volumes for sentiment shifts.

The Bigger Picture

The meme stock frenzy, with GoPro and Krispy Kreme surging while Opendoor and Kohl’s fade, reflects the volatile, sentiment-driven nature of retail trading in 2025. High short interest and social media hype fuel these rallies, but the lack of fundamentals makes them risky. Targeting shorted stocks can uncover opportunities, but success hinges on timing and retail momentum. With the S&P 500 at 6,263.26 and Nasdaq at 21,000, the broader market’s risk-on environment supports speculative plays, but tariff risks and seasonal pullback trends (7-10% in August-September) loom. Investors should trade meme stocks sparingly, diversify with stable assets, and hedge with VIXY or GLD to manage volatility. The meme stock rollercoaster is thrilling—play it smart to avoid a crash.

Are you riding the meme stock wave with GoPro or Krispy Kreme? Or sticking to safer bets? Share your strategy below! 🎁

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