- Chewy shares initially rallied more than 20% after a SEC filing revealed that Keith Gill, known as Roaring Kitty, bought a 6.6% stake in the company
- However, the rally faded and Chewy shares turned negative as the initial boost from Gill’s new stake diminished
- The filing showed Gill purchased just over 9 million Chewy shares, making him the third-largest shareholder in the pet food e-commerce retailer
Chewy‘s stock price rose then fell after influential trader Keith “Roaring Kitty” Gill revealed a large investment in the company. This news comes shortly after Gill exited his position in GameStop, another company he helped drive to meteoric growth.
Roaring Kitty Buys $245 Million Stake in Chewy
According to an SEC filing, Gill purchased over 9 million shares of Chewy, giving him a 6.6% stake in the pet supplies retailer. Based on Chewy’s share price when the purchase was disclosed, Gill’s holdings are worth more than $245 million.
The filing also jokingly states “I am not a cat,” referring to Gill’s appearance before Congress during the GameStop trading frenzy.
Chewy Stock Initially Spikes, Then Sinks
Chewy’s share price climbed over 9% Monday morning following the news of Gill’s investment. However, the stock soon reversed course, quickly falling into negative territory. By midday, Chewy was down 6%.
Last week, Chewy experienced high volatility after Gill posted a cartoon dog resembling the company’s logo on social media. Shares surged as much as 34% but ended slightly down on the day.
Connections Between Chewy and GameStop
Gill is best known for encouraging individual investors to purchase GameStop stock in 2021, causing prices to skyrocket. He recently exited his position in GameStop shares and call options, leading to speculation that he sold to fund his Chewy stake.
GameStop shares fell over 5% on the Chewy news.
There are close ties between the two companies. GameStop CEO Ryan Cohen previously founded Chewy and sold it to PetSmart. Cohen and other former Chewy executives joined GameStop’s board in 2021, helping spark GameStop’s rally.
Ongoing Questions Around Gill’s Influence
Gill has said GameStop is in the midst of a major transition under Cohen’s leadership. However, Gill was recently hit with a lawsuit alleging he manipulated GameStop’s stock through his social media presence.
It remains unclear how much sway Gill holds over individual investors. His stake in Chewy will be closely watched to see if he can replicate the meteoric rise of GameStop.
