Why Krispy Kreme Rocketed Higher Today
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S of doughnut-slinger Krispy Kreme (DNUT 26. 69%) rocketed 26. 7% in Tuesday trading, after the stock appears to have been caught up in a new round of meme stock...
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July 22, 2025
04:24 PM
The Motley Fool
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S of doughnut-slinger Krispy Kreme (DNUT 26. 69%) rocketed 26. 7% in Tuesday trading, after the stock appears to have been caught up in a new round of meme stock fever
Meme stocks are beaten-down stocks with a high short interest, which retail investors on message boards such as Reddit target for purchase in hopes of generating a short squeeze
Nevertheless, Krispy Kreme, along with several other names, is soaring today as part of a current meme stock cohort, it seems
Moreover, No news and a 26% gain is a dangerous combination There wasn't any new news to speak of regarding Krispy Kreme
Moreover, In fact, the most recent news hasn't been good at all
Back in May, the company's first-quarter report was rather dismal, leading the company to cut its dividend and end its partnership with McDonald's, which ved to be unfitable for Krispy Kreme
On the other hand, The company's debt has grown to $935 million, and the doughnut maker is unfitable on a generally accepted accounting principles (GAAP) basis in the wake of softer-than-anticipated demand this year
However, As a result, Krispy Kreme's short interest had increased to 14, in today's market environment. 2% of s outstanding, but a higher 26. 4% of its publicly traded float, as of June 30, given current economic conditions
That's a high-enough short interest, especially in a lower-float stock, to cause a big move on a surge of unexpected buying, considering recent developments
And it appears meme stock traders happened to target Krispy Kreme today
On the other hand, In addition to Krispy Kreme, it appears beaten-down, scandal-plagued retailer Kohl's (KSS 38
Conversely, 05%) was also a meme trade target, with that stock up 38% on the day as well
Image source: Getty Images
Meme stock trading isn't for the faint of heart For those tantalized by the massive gains in a short amount of time, please realize that meme stock trading is highly risky, and that the quick gains of today can fade just as quickly
At the Motley Fool, we preach long-term in high-quality companies, a strategy that has shown long-term outperformance without the risks, headaches, and taxes inherent in trying to time volatile short-term trades on lower-quality stocks
Additionally, So unless you are a meme investor by trade, I'd recommend staying away from Krispy Kreme unless you think a genuine turnaround at the level is within sight
As of now, that turnaround isn't anywhere to be seen
Nevertheless, The Author Billy Duberstein is a contributing writer and analyst for The Motley Fool
Nevertheless, He loves looking at the "story" behind investments from an interdisciplinary point of view, with an equal appetite for high-growth disruptors and beaten-down value names
TMFStoneOak Billy Duberstein and/or his clients has no position in any of the stocks mentioned
On the other hand, This leads to the conclusion that Motley Fool has no position in any of the stocks mentioned
The Motley Fool has a disclosure policy, in this volatile climate.
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