Kohl’s Becomes Latest Meme Stock Due to ‘Social Media Chatter’
Kohl’s stock jumped Tuesday (July 22) as traders talked the retailer up on social media.
[contact-form-7]The company’s shares rose by as much as 105% when the equity market opened, Bloomberg News reported. Kohl’s stock had been trading in single digits for four months.
“It’s all social media chatter,” Steve Sosnick of Interactive Brokers told Bloomberg. “Remember that a highlight of the meme stock era was a dose of nostalgia for companies like GameStop and AMC. Social media chatter can become self-fulfilling.”
The report added that Kohl’s stock has been climbing steadily since April following President Donald Trump’s wide-ranging tariffs.
Bloomberg also notes the troubles the retailer has faced recently. Former CEO Ashley Buchanan was fired in late April after an internal investigation found he violated company policy by directing Kohl’s to enter into a multimillion-dollar consulting contract with a vendor despite “undisclosed conflicts of interest.”
Though the company did not detail the nature of the conflict, several media reports have identified the vendor as Chandra Holt, a fellow corporate executive with whom Buchanan had had a romantic relationship.
“I’ve known Ashley Buchanan for 10 years, but I have not received any compensation for my Incredibrew business from Kohl’s,” Holt told The Wall Street Journal at the time.
Buchanan had been hired as Kohl’s CEO in November, and took the job faced with heading the company’s ongoing turnaround project. The company in March released quarterly earnings at the time that projected a 5% to 7% dip in revenue for the year.
Before his departure, Buchanan said the company had erred in recent years by pivoting from core offerings like jewelry and its proprietary brands while focusing on new categories.
“A lot of the issues were probably self-inflicted over many years of decisions,” said Buchanan. “We have a very loyal customer. When I toured stores, all I heard was how much they love Kohl’s. And what I realized is we’re kind of making it hard for them to love us.”
Former CEO Tom Kingsbury cited the same issue last year when Kohl’s revenue dropped nearly 10% during the quarter.
“Given the importance of opening price points in the current environment, not having the appropriate level of private brands hurt our ability to serve our customers,” he said.
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