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Jim Cramer warns short sellers about Kohl's
Cramer advises short sellers to cover positions amid rising stock prices.

Jim Cramer urges investors shorting Kohl's to reconsider their positions amid market volatility.
Jim Cramer advises short sellers to exit Kohl's now
On Tuesday, Jim Cramer of CNBC advised investors to stop shorting Kohl's stock, comparing the situation to the infamous GameStop short squeeze. He highlighted that nearly 50% of Kohl's shares are sold short, warning that this could lead to a similar financial disaster for those betting against the department store. After a dramatic session where trading was temporarily halted, Kohl's stock soared by over 37% by the end of the day. Cramer pointed out that the company's recent partnerships with brands like Sephora and Amazon do not adequately justify the levels of short selling. He noted that a coordinated effort among retail investors could easily trigger a short squeeze, echoing the events that shocked Wall Street in 2021 with GameStop. Cramer emphasized that while Kohl's faces challenges, including declining sales and substantial debt, its situation is not dire enough to warrant such extensive short positions, advising those involved to cover and exit their positions swiftly.
Key Takeaways
"Kohl's is a textbook example of a stock that had become perfect for the GameStop playbook."
Cramer's comparison warns short sellers of potential risks.
"The shorts have clearly overstepped their boundaries with Kohl's."
Cramer emphasizes the risky position of current short sellers.
"In the end, the short sellers have the wrong target."
Cramer critiques the logic behind short selling Kohl's stock at this stage.
"Cover and move on, hedge funds."
Cramer's strong advice to those heavily invested in shorting Kohl's.
Cramer's analysis spotlights a significant tension in the market, particularly regarding short selling strategies. The comparison to GameStop serves as both a caution and a reminder of the power retail investors can wield when they unite. Investors who underestimate the volatility in stocks like Kohl's risk facing similar repercussions as those who shorted GameStop. The warning also reflects a broader trend of short sellers needing to reassess their strategies, especially when the company’s fundamentals do not entirely support a drastic decline. The dynamic between hedge funds and public investors is shifting, and it is essential for market participants to remain vigilant and adaptable.
Highlights
- Short sellers have miscalculated with Kohl's stock.
- Kohl's is a textbook case for a potential short squeeze.
- Investors should cover their short positions now.
- The short sellers target an unstable but not collapsed company.
High risk for short sellers in Kohl's stock
Short sellers may face significant losses if investment sentiment shifts, as seen in high short positions. This situation could provoke a short squeeze just like the GameStop incident.
The market's unpredictable nature calls for careful consideration from investors.
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