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Roaring Kitty’s Chewy Stake Sparks Volatility
Published On: July 2nd, 2024
Keith Gill, known as “Roaring Kitty,” has made headlines again by unveiling a 6.6% stake in Chewy (CHWY), causing alarm among the pet-product retailer’s executives. This move, disclosed in an SEC filing on July 1, 2024, marks Gill’s first major investment outside of GameStop, linking him once more to Ryan Cohen, the founder of Chewy and current CEO of GameStop. The surprise investment has led to a flurry of activity and concern about potential volatility driven by Gill’s extensive following of retail investors.
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Facts & Figures
- The Stake in Question: 6.6% in Chewy, approximately 9 million shares
- Investment Value: $245 million at the closing price of $27.24 on June 30, 2024
- Market Reaction: Chewy shares rose to $30 before dropping to $25.92, down 4.8%
- Trading Volume: Over 54 million shares traded, three times the 25-day moving average
- GameStop Connection: Gill also holds 9 million shares in GameStop, valued at around $262.1 million as of June 13, 2024
Background on Roaring Kitty & Chewy
Keith Gill gained fame during the 2021 GameStop short squeeze, which saw massive gains due to retail investor enthusiasm driven by his social media activity. His investment strategies and engaging online presence have made him a significant figure in the stock market.
Chewy, founded by Ryan Cohen in 2011, is an online retailer of pet food and products. It has grown significantly and offers a range of services, including auto-ship options, a pet pharmacy, and various pet supplies. The company has experienced fluctuating stock performance, particularly as the post-pandemic pet spending boom has slowed.
The Current Situation & What It Means to Investors
The revelation of Gill’s stake in Chewy has caused significant market reactions. Here’s what’s happening:
- Market volatility: The immediate aftermath of Gill’s announcement saw Chewy’s stock fluctuate wildly, reflecting both excitement and concern among investors. Gill’s influence, reminiscent of the GameStop surge, has led to fears of similar volatility affecting Chewy’s stock stability
- Trading impact: Shares of Chewy rose sharply to $30 before falling back to $25.92, driven by a surge in trading volume as investors reacted to the news. The high trading volume indicates heightened interest and speculation among retail investors
- Connection to GameStop: Gill’s continued investment in GameStop and his admiration for Ryan Cohen suggest that his interest in Chewy may be influenced by Cohen’s past success with the company. This connection has further fueled speculation and interest in Chewy’s stock
The Bottom Line
Gill’s move into Chewy indicates his continued faith in Ryan Cohen’s management and vision, given Cohen’s successful tenure at Chewy before moving to GameStop. However, the market’s reaction underscores the potential for significant volatility driven by Gill’s influence. For Chewy, this means navigating the balance between new investor interest and the stability valued by long-term shareholders.
As the situation develops, investors should stay informed and consider the potential risks and rewards associated with this newfound interest in Chewy. The broader implications for the market also highlight the power of social media influencers in shaping stock movements and investor sentiment. However, the volatility of the stock market may make some investors, especially those with an eye toward their retirement, look at more stable investments. These alternatives can offer a hedge against market turbulence and provide a sense of security for long-term financial planning.
This article is based on available information and market reports. For the latest updates, please refer to official communications from Chewy and related financial news sources like Reuters and the Wall Street Journal.