NEW YORK (AP) — Shares of Chewy fell Monday in volatile trading after a regulatory filing revealed that Roaring Kitty, an investor at the center of the meme stock craze, has taken a 6.6% stake in the online pet retailer.
Roaring Kitty, whose legal name is Keith Gill, bought more than 9 million shares of Chewy last week, the Securities and Exchange Commission filing shows. Based on Friday’s $29.05 closing price, that amounts to a value of over $261 million — making him the company’s third-largest shareholder.
Shares in Chewy jumped more than 20% before the opening bell. But they ended the day down almost 7%.
Chewy, based in Plantation, Florida, did not immediately respond to a request for comment.
Gill tipped his hand last week on his feelings about the company, posting a picture of a dog on social media platform X and sending Chewy’s stock up more than 30% in intraday trading.
Gill made a name for himself in 2021, when he rallied retail investors around GameStop. At the time, the video game retailer was struggling to survive — and big Wall Street hedge funds and major investors were betting against it, or shorting its stock. But Gill and those who agreed with him changed GameStop’s trajectory by buying up thousands of shares in the face of almost all accepted metrics that told investors that the company was in serious trouble.
That began what is known as a “short squeeze,” when those big investors that had bet against GameStop were forced to buy its rapidly rising stock to offset their massive losses.
GameStop saw yet another rally in May — when Gill returned online for the first time in three years.
Gill has said he has faith in the ability of GameStop’s Chairman and CEO Ryan Cohen to modernize the company after what he did at Chewy. Cohen co-founded Chewy back in 2011. He stepped down from his role of Chewy’s CEO in 2018.
Gill’s actions have raised questions about whether he could be accused of stock manipulation. A lawsuit was filed Friday accusing Gill of engaging in a “pump and dump scheme” in regards to GameStop. But a court filing Monday indicated the plaintiff had voluntarily withdrawn the suit.
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Rephrased content:
Shares of the online pet retailer Chewy experienced a drop in value on Monday due to a revelation in a regulatory filing showing that Roaring Kitty, also known as Keith Gill, a major figure in the meme stock frenzy, has acquired a 6.6% stake in the company. Gill purchased over 9 million shares of Chewy, amounting to a value exceeding $261 million based on Friday’s closing price of $29.05, making him the third-largest shareholder.
Following the disclosure, Chewy’s shares initially surged by more than 20% at the start of trading, but ultimately closed the day with nearly a 7% decrease. The company, headquartered in Plantation, Florida, has not provided an immediate comment on the matter.
Keith Gill hinted at his positive sentiment towards Chewy by posting a picture of a dog on a social media platform, which drove the stock price of the company up by more than 30% during intraday trading. Gill gained prominence in 2021 for rallying retail investors behind GameStop, a struggling video game retailer that faced challenges from Wall Street hedge funds betting against its stock through short selling.
This led to a “short squeeze,” where the significant investors who had bet against GameStop were compelled to purchase its rapidly appreciating stock to cover their substantial losses. Gill’s recent return online sparked another rally in GameStop’s stock. He expressed confidence in GameStop’s Chairman and CEO Ryan Cohen’s capacity to revitalize the company based on his successful track record at Chewy, which Cohen co-founded in 2011 before relinquishing his position as CEO in 2018.
Controversy surrounds Gill’s actions, as there have been speculations of potential stock manipulation. A lawsuit was filed alleging Gill’s involvement in a “pump and dump scheme” related to GameStop, although a court filing on Monday disclosed that the plaintiff had chosen to withdraw the suit voluntarily.
