Krispy Kreme, Inc. (DNUT) shares skyrocketed 25.61% in pre-market trading, building on its impressive 14% gain from the previous session. This surge comes as the doughnut chain finds itself at the center of a renewed meme stock frenzy, captivating retail investors and squeezing short sellers.

The dramatic rise in Krispy Kreme's stock price appears to be fueled by increased attention from retail investors. According to data from stocktwits.com, a popular social media platform for retail traders, DNUT was among the stocks with the most new watchers in the last 24 hours. This surge in interest is reminiscent of the meme stock phenomenon that has periodically gripped the market in recent years, with Krispy Kreme emerging as a favored pick among retail traders.

Adding to the stock's volatility is the high level of short interest. Data compiled by LSEG shows that 15.1% of Krispy Kreme's free float is currently sold short, making it a prime target for a potential short squeeze. As the stock price rises, short sellers may be forced to buy back shares to cover their positions, potentially driving the price even higher. This dynamic, combined with the enthusiasm of retail investors, could explain the stock's explosive movement in recent trading sessions.