Here's how companies like Kohl's and Krispy Kreme got caught in the meme stock frenzy

Kohl's price, for example, is down around 40% over the past year.While Kohl's has seen its sales and fitability decline in recent years, it's still a widely recognized company."It's a household name, and it's much easier to get people interested and excited manipulating a household name than it is with a relatively unknown stock," said GlobalData managing director Neil Saunders. "I think that recognition is quite important in allowing almost the meme or the narrative to spread, and for more people to jump on the bandwagon."Meme stocks are also often heavily shorted, meaning investors have bet on them to go down. 47% of Kohl's, 28% of Krispy Kreme and 9% of Go's outstanding s are sold short, according to FactSet.When shorting a stock, investors borrow s from a broker and sell them on the open market

The investor is hoping to buy back that when the price goes down and keep the fit from the initial sale.In the case of meme stocks, hoards of traders rally together on forums, Reddit, to drive the price up

When the price of a shorted stock rises instead of falling, those investors who shorted the stock will also buy back their s to minimize further losses."What you end up [with] is this kind of really intense back loop that pushes and inflates the price

And obviously people involved in this, doing the buying and the selling, can make money off the back of these quite wild swings," Saunders said.Watch the to learn more how companies Kohl's become a meme stock.CNBC's Gabrielle Fonrouge contributed to this report.