Wall Street is experiencing a powerful sense of déjà vu as a new wave of individual investors bands together to challenge institutional short sellers. Coordinated buying has suddenly flooded into heavily bet-against companies like Opendoor and Kohl’s, triggering massive volatility and forcing hedge funds to cover their positions. This resurgence of retail trading power signals that the high-stakes tactics of 2021 have returned to the main stage.
Meme Stock Mania Returns to Wall Street
The financial world thought the days of internet-fueled trading frenzies were in the rear view mirror. Yet, late 2025 has brought a fresh explosion of activity that looks remarkably similar to the historic GameStop saga. Retail traders are organizing on platforms like Reddit and X to identify stocks that major hedge funds expect to fail. Their goal is to drive the price up artificially to force those funds to buy back shares at a loss.
This time the targets are different but the mechanics remain the same. Investors have set their sights on companies with high short interest that are sensitive to economic shifts. Opendoor Technologies and Kohl’s Corporation have emerged as the primary battlegrounds. Both companies have struggled with fundamental business challenges recently. This weakness attracted aggressive betting from Wall Street pros who profited as the stock prices fell.
Retail traders saw an opportunity where professionals saw a graveyard.
The sudden influx of buy orders has caught market makers off guard. Volume on these tickers has spiked over 400 percent in the last week alone. This surge is not driven by traditional earnings reports or corporate announcements. It is driven by sentiment and a collective desire to prove the experts wrong.
Why Investors Are Hunting Short Sellers
The strategy relies on a specific market mechanism known as a short squeeze. When a hedge fund shorts a stock, they borrow shares and sell them immediately. They hope to buy them back later at a cheaper price to return to the lender. The profit is the difference between the sell price and the buy price.
Retail traders disrupt this by buying the stock and refusing to sell. As the price climbs, the hedge funds face unlimited potential losses. They are eventually forced to buy shares at any price to close their position. This forced buying acts like rocket fuel. It pushes the stock price even higher and attracts more momentum traders into the fray.
opendoor and kohls stock chart rising on smartphone screen
Here is how the modern squeeze cycle plays out:
- Identification: Traders use data tools to find stocks where more than 20 percent of available shares are sold short.
- Accumulation: Small investors start buying shares and call options to build pressure.
- Viral Spread: Influencers share charts and memes to recruit more buyers on social media.
- The Pop: The stock price jumps causing panic among short sellers who must cover their bets.
- Gamma Squeeze: Market makers who sold options must buy stock to hedge their risk which accelerates the rise.
This feedback loop creates a chaotic environment where fundamentals no longer matter. The price disconnects from reality. It becomes a pure battle of liquidity and willpower between the decentralized mob and centralized capital.
Opendoor and Kohls Lead the Charge
Opendoor has become the poster child for this new movement. The digital real estate platform faced severe headwinds as interest rates remained elevated. Many analysts wrote the company off as the housing market cooled. Short interest in Opendoor hovered near record highs as funds bet on its bankruptcy or delisting.
Traders have taken the other side of that trade. They argue that any cut in interest rates will turn the company into a goldmine. This contrarian view sparked a buying frenzy that doubled the share price in mere days.
Kohl’s represents a different kind of target.
The department store giant is a classic value play that went sour. It sits on valuable real estate and pays a dividend but struggles with declining sales. Short sellers believe the retail apocalypse will eventually claim the chain. Retail investors see deep value and a potential buyout target. The clash between these two views has turned Kohl’s into a volatile casino for day traders.
| Feature | Opendoor (OPEN) | Kohl’s (KSS) |
|---|---|---|
| Primary Sector | Real Estate Technology | Retail Department Store |
| Bull Case | Interest Rate Cuts | Real Estate Assets |
| Bear Case | Housing Stagnation | Declining Mall Traffic |
| Squeeze Trigger | High Beta / Volatility | Value Trap Reversal |
Investors are not just buying stock. They are loading up on short-dated call options. This aggressive leverage forces dealers to buy the underlying stock to manage their own risk books. It adds another layer of buying pressure that short sellers find difficult to combat.
Experts Warn of High Risks Involved
Financial advisors and market analysts are sounding alarm bells despite the euphoria. They warn that chasing these rallies can lead to devastating losses for latecomers. The history of 2021 teaches a harsh lesson. Stocks that go up vertically tend to come down just as fast once the momentum breaks.
The underlying business problems for these companies have not vanished.
Opendoor still needs to sell homes in a tough market. Kohl’s still needs to convince shoppers to visit physical stores. A higher stock price does not fix a broken business model. It only buys management time.
Regulators are also watching closely. The SEC implemented new rules after the GameStop event to shorten settlement times and improve transparency. However, there is little they can do to stop people from buying stocks they like. Brokerages have responded by raising margin requirements. This makes it more expensive to trade these volatile names using borrowed money.
“Liquidity can disappear in an instant during these events,” notes a senior market strategist from a leading firm. “When the music stops, there are rarely enough chairs for everyone involved.”
Traders must remain vigilant. The most successful participants in these squeezes are often those who take profits early. Those who hold on for too long out of greed or ideological commitment often end up holding the bag.
The revival of the short squeeze trade proves that the retail investor is still a force to be reckoned with. While Wall Street attempts to return to business as usual, the collective power of the internet remains a sleeping giant that can wake up at any moment. Whether this rally in Opendoor and Kohl’s sustains itself or collapses will depend on how long the crowd can hold the line.
Tell us what you think about this market movement. Are you jumping into the trade or staying on the sidelines? Share your thoughts in the comments below and tag your posts on X with #Squeeze2025 to join the conversation.
