Meme Stock Rally Builds as Krispy Kreme, GoPro Join the Fray

The meme stock rally is back and gathering steam. 

Shares of two other struggling companies—Krispy Kreme (DNUT) and action camera company GoPro (GPRO)—are extending their recent surge and joining those of online home buying website Opendoor (OPEN) and home goods retailer Kohl’s Corp. (KSS) in being part of a social media-fueled buying frenzy by retail investors.

Shares of the donut maker were up more than 18% in early trading Wednesday, after closing up about 27% on Tuesday, but remain down by 50% this year. GoPro shares are jumping around 45% and closed up more than 40% Tuesday. They are up more than 80% this year.

The recent meme stock favorites seemed to be losing favor early Wednesday. Opendoor shares, which closed Tuesday down 10%, extended their losses and are currently 13% lower; shares of Kohl’s, which finished almost 40% higher Tuesday, are currently down 14%.

Like the shares of Opendoor and Kohl’s, both Krispy Kreme and GoPro were heavily cited by users of the wallstreetbets subreddit—notorious for fueling the GameStop meme stock frenzy in 2021—despite little news about the companies. 

They are also both grappling with declining revenue: Krispy Kreme, in its latest quarterly report in May posted declining sales and said it would pause its quarterly dividend as it sought “greater financial flexibility,” while GoPro reported a drop in sales in the first quarter.

The stock market, which continues to hover near highs, is driving some of the renewed mania by retail investors for meme stocks. On Tuesday, the S&P 500 (SPX) closed at a record high, the tech-heavy Nasdaq Composite (IXIC) came off slightly from Monday’s record finish, and the Dow Jones Industrial Average (DJI) ended near its high last hit in February.

Retail investors also seem to be buying heavily shorted stocks, as in the case of GameStop four years ago.  Around 14% and almost 8% of Krispy Kreme and GoPro’s outstanding shares available for trading are shorted, respectively, Reuters reported.

UPDATE—This article has been updated with the latest share prices.