Jim Cramer does a 180 on meme stocks. What's that about?

Wall Street’s Jim Cramer just flipped the script after years of bashing meme stocks like GameStop and AMC, by suddenly telling everyone on Tuesday night to stop shorting Kohl’s. Yeah, Kohl’s. The same department store chain that most people forgot even existed.

“The shorts have clearly overstepped their boundaries with Kohl’s. They’ve run into a buzz-saw of their own creation,” Jim said. “Even now, I think they’d be wise to cover their short and move on before they have another GameStop on their hands.”

That statement came right after Kohl’s stock went nuts. Trading was so volatile on Tuesday that it had to be temporarily halted. Once the dust settled, shares ended the day up a massive 37.62%. According to FactSet, roughly 50% of Kohl’s outstanding shares were sold short, making it a prime target for a squeeze.

Cramer calls out short sellers over Kohl’s stock surge

Let’s be clear. Jim wasn’t praising Kohl’s actual business. He straight-up said that the company’s partnerships with Sephora or Amazon weren’t driving the stock’s movement. Instead, he argued that the stock was being bought because of how heavily it was shorted.

According to Jim, this was purely a momentum play built around short interest. He pointed out that Kohl’s had been discussed on the WallStreetBets subreddit, the same place that sparked the infamous 2021 short squeeze. He said the playbook looked identical.

Back in 2021, the GameStop squeeze cost hedge funds close to $20 billion, driven by retail traders banding together online to force short sellers into panic-buying shares to close their positions.

And here’s the weirdest part: Jim used to hate this kind of stuff. He was one of the loudest voices calling out meme stocks as hype machines. He regularly said names like GameStop and AMC were being driven by emotion, not numbers. He dismissed the POTUS’ Trump Media & Technology Group (DJT) as “overvalued” and said the moves weren’t backed by revenue or profits.

Just a few years ago, Jim sided with the short sellers. He tried hard to talk down retail investor excitement during the GameStop frenzy. His 2021 take? Sell GameStop at $400. That got him roasted so badly online that a new meme was born: Inverse Cramer.

Retail traders started doing the exact opposite of what he recommended. It became a whole thing. He was mocked all over Reddit, especially in the r/WallStreetBets community, for being the poster child of outdated investment thinking.

So for him to now say hedge funds should “cover and move on” feels like a full reversal. He believes the short position doesn’t match Kohl’s fundamentals, or retail power. There’s debt, and sales are slipping, but the company isn’t falling apart. And that’s his issue. He doesn’t think the target makes sense if you’re betting on total collapse.

Jim also called out hedge funds directly, saying they should’ve closed their shorts earlier this year when the stock dipped after Wall Street panicked about President Donald Trump’s new tariffs. That spring sell-off, according to him, was the time to exit. Not now.

“In the end, the short sellers have the wrong target,” Jim said. “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 were still shorting Kohl’s down here in the single digits.”

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