The news of meme stock trader “Roaring Kitty” buying a 6.6% stake in Chewy sent the shares of the pet food e-commerce retailer soaring in premarket trading. With just over 9 million shares purchased, Roaring Kitty has become the third-largest shareholder in the company, according to FactSet. This move has added more than $245 million in value to his stake based on Friday’s closing price.
The Impact on Chewy’s Stock Performance
Following the announcement of Roaring Kitty’s investment, Chewy’s stock surged by more than 20% before the market opened. The SEC filing also drew attention to a quirky section where Roaring Kitty confirmed he is not a cat, a reference to his earlier statements during congressional hearings about the GameStop trading frenzy in 2021. This filing caused a stir in the financial markets and led to increased interest in Chewy’s shares.
The ties between GameStop and Chewy run deep, with both companies sharing a significant link through Ryan Cohen. Cohen, the former CEO and founder of Chewy, played a key role in PetSmart’s acquisition of Chewy in 2017 and its subsequent IPO in 2019. He later joined the GameStop board of directors in January 2021, along with two other Chewy executives, which helped kickstart the GameStop rally.
Since joining GameStop, Cohen has led a remarkable turnaround for the brick-and-mortar video game retailer. During a recent YouTube livestream, Roaring Kitty emphasized that GameStop is undergoing a reinvention under Cohen’s leadership. The company is transitioning to e-commerce, making it not just a bet on GameStop but also a bet on Cohen himself.
Roaring Kitty, whose real name is Keith Gill, gained prominence for his role in rallying retail investors to support GameStop in 2021. A former marketer for Massachusetts Mutual Life Insurance, Gill successfully encouraged investors to buy GameStop shares and call options, resulting in a significant short squeeze on hedge funds. His recent investment in Chewy further solidifies his influence in the financial markets.
The partnership between GameStop and Chewy, along with Roaring Kitty’s strategic investments, highlights the evolving landscape of the stock market. As these interconnected relationships continue to shape market dynamics, investors will closely monitor developments in both companies to capitalize on potential opportunities for growth and profit.