If you’re getting a sense of déjà vu from the market chatter lately, you’re not alone. A new acronym is making the rounds — the “DORK” stocks — and it feels an awful lot like a rehash of the meme stock mania that took over in 2021. For those who don’t remember, that episode didn’t end well for many retail investors who jumped in late. I’m skeptical this sequel will have a different ending.

The stocks in this new club are Krispy Kreme (DNUT), Opendoor Technologies (OPEN), Rocket Companies (RKT), and Kohl’s (KSS). Just like their predecessors, these names are seeing eye-popping spikes in trading volume and price volatility that seem completely detached from their underlying business performance. And believe me, when you look at that performance, the picture isn’t pretty.

Hype Over Health

Let’s be clear: a catchy acronym is not an investment thesis. All four of these companies are currently losing money. In the first quarter, Krispy Kreme’s revenue fell 15% year-over-year, leading to a $33.4 million loss. Opendoor, the real estate platform, saw its revenue dip 2% and posted an $85 million loss. Rocket Companies, a mortgage provider, had an even steeper 25% revenue decline and a $212 million loss. Even the familiar retailer, Kohl’s, saw sales drop over 4% and ended the quarter $15 million in the red.

So, if the fundamentals are this weak, why the sudden interest? The answer, once again, is the allure of a short squeeze.

The strategy hinges on the fact that a massive number of institutional investors are betting against these companies. For both Rocket and Kohl’s, more than half of their publicly available shares are sold short. For Opendoor, that figure is over 30%. These are incredibly high numbers, indicating a strong belief among many professional investors that these stocks are headed lower.

Retail traders see this as an opportunity. By buying up shares en masse, they hope to create upward price pressure. This can force the short-sellers into a “squeeze,” where they have to buy back shares at a higher price to close their positions and cut their losses, which in turn drives the stock price even higher. It’s the same dynamic that propelled GameStop into the stratosphere four years ago.

Volatility Is Not Your Friend

We’re already seeing the wild swings this strategy produces. Kohl’s, which typically sees about 13 million shares traded daily, saw a staggering 209 million shares change hands on July 22nd. The stock rocketed 120% in two days before giving nearly all of it back. Opendoor surged 380% in a month after a hedge fund manager suggested a wildly optimistic price target, with trading volume on one day hitting 1.8 billion shares, compared to its average of 165 million.

Trading on pure momentum without regard for the actual health of the business is not investing; it’s speculation. For every person who times it right, many more get caught holding the bag when the hype dies down and the price comes crashing back to reality. You simply cannot predict these short-term movements, which are driven by supply and demand, not by value.

My advice is to steer clear. There are hundreds of companies with solid fundamentals, consistent profits, and sustainable business models that are far better places for your capital. However, if you’re absolutely determined to play in this high-risk sandbox, treat it like a trip to the casino. Only use a small amount of money that you are fully prepared to lose. With volatile bets like the DORK stocks, overplaying your hand is a sure way to get burned.