By Shashwat Chauhan, Medha Singh and Sinéad Carew
(Reuters) -Investor enthusiasm faded for the latest meme stocks on Wednesday, with shares in heavily shorted Krispy Kreme and GoPro closing well below their session highs, while Tuesday’s investor darling – department store Kohl’s – finished sharply lower.
Individual investors have been betting on riskier pockets of the market, including cryptocurrencies and lower-priced consumer-facing stocks, as the broader equity market has soared to record highs recently.
Shares of doughnut chain Krispy Kreme, nearly 32% of whose free float has been shorted, ended up 4.6% at $4.32. Earlier the stock hit a session high of $5.73, with a record trading volume of more than 151 million shares.
The stock had rallied nearly 27% on Tuesday with 44 million shares changing hands compared with the 5.28 million average for the last 50 days. Earlier on Tuesday, Krispy Kreme was among the top trending stocks on Stocktwits, a retail investor-focused social media platform.
Action camera maker GoPro’s shares rose 12.4% to $1.54 after earlier hitting $2.37, the highest level since late March 2025. Plant-based meat company Beyond Meat added 1.4% after earlier hitting $4.82, its highest level since December 4.
Many individual investors did well by taking risky bets when institutions were selling in April, when equity volatility erupted over uncertainty around U.S. tariff policies, according to Steve Sosnick, chief strategist at Interactive Brokers, which has a high number of retail customers.
“That has given them the financial wherewithal and the psychological temperament to seek out risky situations. They were rewarded handsomely for embracing risk at a very risky time,” Sosnick said. “Now they’re extending it to search for high-risk situations that have potentially high returns.”
With the paring of gains on Wednesday, Sosnick said the staying power of the meme-type rallies seemed to be shrinking.
“People realize that there isn’t a fundamental reason for these rallies to be occurring. They’re simply…
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