Wall Street personality Jim Cramer caused a stir Tuesday evening by dramatically shifting his stance on meme stocks. This time, he focused on Kohl’s – the department store chain most investors had long written off – and issued a surprising warning to short sellers to back off.

“Kohl’s short sellers have clearly overplayed their hand,” Cramer said on-air. “At this point, it would be wise for them to cover and move on before this becomes another GameStop.”

His comments came just as Kohl’s shares experienced a massive surge. Trading had to be temporarily halted due to extreme volatility, and when the dust settled, the stock closed up a staggering 37.62%. According to FactSet, about 50% of Kohl’s shares were sold short, making it a prime candidate for a short squeeze.

Cramer Suddenly Defends Stocks He Used to Dismiss

Importantly, Cramer wasn’t praising Kohl’s business fundamentals. He made it clear that partnerships with Amazon or Sephora weren’t the reason behind the stock’s sharp move. Instead, he argued it was all about short interest and momentum.

He pointed out that Kohl’s was being discussed on Reddit’s WallStreetBets forum – the same group that ignited the infamous GameStop squeeze back in 2021. To Cramer, the pattern looked familiar: retail investors rallying around a heavily shorted stock and pressuring hedge funds to cover.

Back in 2021, that kind of movement cost hedge funds nearly $20 billion when GameStop’s stock soared due to a retail-led buying frenzy.

Yet Cramer Used to Bash This Kind of Behavior

This reversal is especially noteworthy given Cramer’s long-standing opposition to meme stocks. He frequently called GameStop and AMC “hype machines” with no earnings power, driven by emotion rather than fundamentals. He dismissed Trump Media & Technology Group (DJT) as “overvalued” and criticized investors for ignoring revenue and profit data.

During the height of the GameStop saga, Cramer even told viewers to sell at $400 – advice that got him widely mocked and gave birth to the “Inverse Cramer” meme. Reddit communities, especially WallStreetBets, began doing the exact opposite of what he recommended, branding him as the symbol of outdated financial advice.

Now Cramer Is Targeting Hedge Funds Instead

Today, Cramer argues that betting against Kohl’s is a flawed strategy. Yes, the company has debt and declining sales, but it’s far from collapse. If you’re shorting a stock, he says, the thesis has to be that the company is heading for zero – and that doesn’t apply here.

He also criticized hedge funds for missing the right timing. According to Cramer, they should have covered their shorts earlier this year, during a panic sell-off triggered by President Trump’s new tariff announcements. That was the exit window. Now it’s too late.

“Short sellers have picked the wrong target,” Cramer said. “This is a company with slumping revenues and large debt – but it’s not going bankrupt. That’s the type of profile you need if you’re going to short something meaningfully.”


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