A new wave of Meme Stock Rally mania gripped Wall Street on July 23, 2025, with retail traders fueling a sharp rally in heavily shorted and underperforming stocks. Krispy Kreme and GoPro led the charge, with dramatic intraday surges that evoked memories of the 2021 GameStop saga. Shares of Krispy Kreme spiked nearly 39% before trimming gains to close 4.6% higher at $4.32, while GoPro soared as much as 73% intraday before ending up 12.4% at $1.54.
Other companies such as Beyond Meat, Kohl’s, and Opendoor also joined the frenzy. While these rallies offered quick profits, the absence of strong earnings or business catalysts raised concerns about the sustainability of the trend.
Reddit Hype and Short-Squeeze Dynamics
Much like previous Meme Stock Rally, the rally was sparked by social media chatter and short-squeeze speculation. Retail investors, largely coordinating via platforms like Reddit’s WallStreetBets, X, and Stocktwits, targeted stocks with high short interest to force institutional investors to buy back shares at higher prices.
According to analysts, Krispy Kreme had over 32% of its free float sold short, making it a prime candidate. GoPro’s short interest ranged between 8% and 14%, contributing to its rapid price spike.
Yet, the rally lost steam as the day progressed. Kohl’s dropped over 14% and Opendoor fell nearly 20%, despite earlier being up 300% in July. Interactive Brokers’ Steve Sosnick noted that retail traders had become more comfortable embracing high risk after recent market rebounds, though many analysts warned that these spikes are “untethered to fundamentals”.
Market Conditions Fueling the Frenzy
The broader market climate—marked by record highs in the S&P 500, strong retail participation, and low-interest-rate optimism—created fertile ground for speculative trading. Retail investors poured over $155 billion into U.S. stocks and ETFs in the first half of 2025, according to FT, feeding demand for volatile assets.
Analysts warned that this pattern, while profitable for some, could end abruptly. Deloitte Bank’s Daniela Hathorn pointed out the disconnect between surging stock prices and weak corporate performance, calling it a classic sign of sentiment-driven overvaluation.
Meanwhile, regulators such as ESMA in Europe issued fresh advisories urging caution in meme stock trading, highlighting its unpredictability and risk for retail investors.
The revival of Meme Stock Rally underscores the growing power—and risk—of retail-driven speculation in today’s digital financial markets. While names like Krispy Kreme and GoPro enjoyed massive short-term surges, their long-term prospects remain uncertain without corresponding business growth. As history has shown, social media momentum can send stocks to the moon—but gravity often brings them back just as fast.
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