- The class-action lawsuit against Keith Gill (Roaring Kitty) was voluntarily dismissed by the plaintiff.
- GameStop shares declined by more than 5% after Gill disclosed a 6.6% passive stake in Chewy Inc.
- Citadel Advisors held a significant number of call and put options in Chewy Inc., raising questions about their involvement in the GameStop short-squeeze controversy.
Earlier this week, GameStop shares declined after Keith Gill, better known as Roaring Kitty, disclosed a large stake in Chewy. However, the video game retailer’s stock is now trading higher in after-hours trading following new developments in the saga surrounding Gill.
Lawsuit Against Roaring Kitty Dropped
According to court documents, the class action lawsuit filed against Gill alleging stock manipulation has been voluntarily dismissed by the plaintiff without prejudice.
The lawsuit accused Gill of illegally driving up GameStop’s stock price through his social media activity under the pseudonym Roaring Kitty. However, the plaintiff has now opted to drop the case.
Chewy Connection
Gill’s link to Chewy has drawn attention given the pet supplies retailer’s ties to Citadel. Last week, Gill revealed a 6.6% passive stake in Chewy worth around $300 million.
Interestingly, Citadel Advisors held substantial call and put options on Chewy at the end of Q1 2022. Citadel Securities, meanwhile, was embroiled in the GameStop short squeeze saga last year over payment for order flow allegations.
During the frenzied trading in GameStop in early 2021, Citadel was accused of instructing broker Robinhood to halt trading of the stock. Citadel denied any wrongdoing.
GameStop, Chewy Shares Rise Slightly
Following the dismissal of the lawsuit, GameStop shares are up slightly in after-hours trading. Chewy stock is also trading marginally higher after the news.
While it’s unclear if the lawsuit dismissal will have any lasting impact, the latest twist continues the long-running GameStop saga. With Gill and Citadel both linked to Chewy, the connections between these companies remain complex.
