Kohl’s Corporation (NYSE:KSS) is one of the stocks that Jim Cramer looked at. During the episode, Cramer suggested that the short sellers cover their shorts and “move on.” He commented:
“It all started on social media. I saw it on Reddit’s Wall Street Bets section, it’s time to buy the stock of Kohl’s. Why? Because of the gigantic short position… It was all about the short position, which is close to 50%… of the float, yet nearly half of the shares that trade were sold short. Whenever you have such a huge short position, it’s easy for buyers to get together online and orchestrate a short squeeze, defenestrating the hedge funds that are shorting it, to which I say, what the heck do the shorts, not the memesters, but the shorts think they’re doing here?… This chain with the balance sheet that isn’t all that bad simply should not be that heavily shorted down here. It’s moronic. Kohl’s may not be great, but it isn’t terrible either…
Kohl’s was a textbook example of a stock that had become perfect for the GameStop playbook. Ganging up on the shorts was like shooting fish in a barrel…
… Look, I don’t have a dog in this hunt. I am not a friend of the shorts or those who are trying to destroy them. I will say that where there’s smoke, there may even be some fire, given how this one ignited into a double so fast. The shorts have clearly overstepped their boundaries with Kohl’s. They’ve run into a buzz-saw of their own creation. Even now, I think they’d be wise to cover their short and move on before they have another GameStop on their hands.
In the end, the short sellers have the wrong target: a company with declining sales and a lot of debt, but not one that’s about to fall apart, which is what you need if you’re still shorting Kohl’s down here in the single digits. Hedge funds, take my advice: cover and move on.”
A man in black suit holding a tablet looks at stock market data on a monitor. Photo by Tima Miroshnichenko on Pexels
Kohl’s (NYSE:KSS) is an omnichannel retailer offering apparel, footwear, beauty, accessories, and home products through physical stores and online.
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Disclosure: None. This article is originally published at Insider Monkey.
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