Kohl's and the potential for being the next Squeeze game!

A short squeeze happens when a heavily shorted stock’s price rises sharply, forcing short sellers to buy back shares to cover their positions, which drives the price even higher. Key ingredients include high short interest, a low float, and a catalyst (like strong earnings, news, or retail investor frenzy). Let’s look at Kohl’s through this lens:
Short Interest: As of early April 2025, Kohl’s had a short interest of about 49 million shares, or roughly 61.44% of its float, which is high compared to its peers (average peer short interest is around 8.4%). High short interest is a prerequisite for a squeeze, as it means there’s a lot of potential buying pressure if shorts need to cover. However, this alone isn’t enough—GameStop’s 2021 squeeze had short interest over 100% at its peak, so Kohl’s is notable but not extreme.
Float and Liquidity: Kohl’s float (shares available for trading) is decently sized, which can dilute the impact of a squeeze compared to a small-cap stock with a tiny float. A larger float means it takes more buying volume to move the price significantly, making a squeeze harder to sustain unless there’s massive coordinated interest.

Recent Price Action: Kohl’s stock jumped 8% to $7.17 on April 7, 2025, with above-average volume, driven by optimism around inventory and expense management. But it’s also been volatile, with a 31% drop after cautious 2025 guidance and a 75% dividend cut earlier in March. The low price ($7-ish) makes it accessible to retail traders, who often fuel meme-driven squeezes, but it also reflects weak fundamentals, which can deter sustained buying.
Catalysts: There’s no clear catalyst right now. Kohl’s is closing 27 stores by April 2025, signaling struggles in brick-and-mortar retail. Analyst sentiment is mixed—Bank of America sees challenges in rebuilding sales, and

Market Context: Recent market volatility, driven by tariff fears and a 10%+ S&P 500 drop, has boosted short sellers’ profits broadly ($159 billion in six days). This suggests shorts are confident, and Kohl’s, with its retail exposure, could stay under pressure unless something disrupts the bearish narrative. A short-covering rally could happen if broader market sentiment shifts, but Kohl’s fundamentals (declining sales, earnings revisions down 94%) don’t scream “bullish.”

Counterpoints: Kohl’s short interest has actually fallen 9.98% recently, suggesting some shorts are already covering, which could reduce squeeze potential. Also, department stores like Macy’s and JCPenney are struggling too, so Kohl’s isn’t uniquely positioned for a breakout. Retail investor coordination (like on Reddit or X) would need to ramp up significantly, and there’s no evidence of that scale yet.

Conclusion: Kohl’s has some ingredients for a short squeeze—high short interest and a low stock price—but it lacks a strong catalyst and the kind of retail frenzy needed to ignite one. Its fundamentals are shaky, and recent news (store closures, dividend cuts) leans bearish. It’s a stock to watch if you’re into high-risk plays, but it’s not screaming “next GameStop” right now. Always dig into the numbers and consider the broader market—things can shift quickly.