Reddit Meme Traders Glaze Over Fundamentals, Trigger 7,000% Surge in $DNUT Options Volume

We’re in the thick of another meme stock moment… and not the slow-burn kind. This is full-on, Reddit-backed mania. Opendoor, as we all just saw… just surged out of its Zillow-wannabe grave. Kohl’s? Exploded nearly 40% in a single day because why not. And now? It’s Krispy Kreme’s turn at bat. (Because apparently meme traders are hungry again… and sugar’s back on the menu.)

Which brings us to one of the funniest setups Wall Street didn’t see coming… When Krispy Kreme dumped McDonald’s last month, Wall Street didn’t exactly throw them a going-away party. The breakup wasn’t mutual. The doughnut deal wasn’t profitable, the sales were slowing, the losses were piling up, and the company did that fun little corporate maneuver we all love: yanking their full-year outlook into the void like it never existed.

Translation: they were losing money, had no clue what was coming next, and were basically waving a white flag made of glazed dough and debt. So naturally… the stock just soared 27% yesterday and is up 32% (at the time of this writing).

Because this is 2025, and logic is optional. (And meme traders are once again treating bad news like rocket fuel.)

Before we get to the part we both know you’re really here for… let’s rewind for a second, because it’s far worse than the Mickey D’s deal going up in flames. Back in May, Krispy Kreme’s Q1 earnings report was, for lack of a better term, a powdered train wreck. Revenue missed, GAAP profits were nonexistent, and net debt ballooned to a staggering $935 million. The company responded by cutting its dividend and walking away from the McDonald’s deal… a move that, on paper, should’ve triggered a long-term bearish narrative.

For instance, losing access to one of the largest fast-food networks in the world isn’t exactly a bullish signal for your retail distribution strategy. And if McDonald's (a company that can sell Filet-O-Fish in bulk) can’t make doughnuts work, that says a lot.

(Source: 5Chicago)

But who would’ve thunk that dumpster fire of an earnings report is exactly what put Krispy Kreme on the radar for meme stock warriors.You see, $DNUT (yes, the ticker is DNUT because of course it is) is the holy trifecta of a meme stock:

Beaten down? Yep. It was down 66% YTD before the rally.

High short interest? Oh yeah. Try 32.2% of the free float shorted.

Stupidly memeable? Buddy, this is a doughnut chain called Krispy Kreme. People were literally posting “DO or $DNUT (making it the perfect candidate).

And with Reddit and X in full “diamond hands mode,” the WallStreetBets crowd swarmed in like it was 2021 again. Options volume hit 100,000 calls in a day (71x the average), and people started calling it the “next AMC”... only sweeter and with more sprinkles. Just so we’re clear: nothing fundamentally changed (checks notes). Sales are still down three straight quarters. Margins are still nonexistent. And the growth plan is MIA (at least for now).

But that’s the point. In this current wave of meme fever (where bad news is somehow bullish and high short interest is considered a green flag) Krispy Kreme’s stock had just enough gasoline (read: shorts) and internet heat to launch it into full glazed meme mode.

This stock is now completely decoupled from the underlying business. Analysts are waving red flags like they're guiding planes on an aircraft carrier. But retail traders don’t care. (In fact, red flags might as well be buy signals at this point.) So is this the beginning of a $DNUT turnaround? Probably not. If I had to bet, I would bet it falls 10% tomorrow… But is it hilarious that a donut stock with negative cash flow, no dividend, and a failed McDonald's rollout is mooning because Reddit said so? Absolutely.

Honestly, if Tupperware drops another going concern warning, don’t be surprised if it jumps 30% intraday. All it takes is one TikTok about “boomer plasticware being the next crypto” and we’re off to the races (yes, I know it’s delisted, but anything’s possible at this point).

At the time of publishing this article, Stocks.News holds positions in McDonald’s as mentioned in the article.