Roaring Kitty takes significant stake in Chewy, causing stock volatility

In a recent development, shares of Chewy experienced a decline in volatile trading following a regulatory disclosure that Roaring Kitty, also known as Keith Gill, a prominent figure in the meme stock phenomenon, has acquired a 6.6% stake in the online pet retailer. Gill purchased over 9 million shares of Chewy last week, as per the Securities and Exchange Commission filing, amounting to a value exceeding $261 million based on Friday's closing price of $29.05. Despite becoming the company's third-largest shareholder, Chewy's shares closed the day down nearly 7%. The company, headquartered in Plantation, Florida, did not provide an immediate response to requests for comments. Gill's influence on stock movements was evident when he hinted at his positive sentiments towards Chewy by posting a dog picture on a social media platform, causing a more than 30% surge in the company's stock during intraday trading. Gill gained recognition in 2021 for mobilizing retail investors around GameStop, a struggling video game retailer that faced opposition from major Wall Street hedge funds and investors who were shorting its stock. By rallying supporters to purchase GameStop shares, Gill initiated a "short squeeze," compelling those betting against the company to buy its rising stock to mitigate substantial losses. Despite stepping down as Chewy's CEO in 2018, Gill expressed confidence in GameStop's potential for modernization under the leadership of Chairman and CEO Ryan Cohen, drawing parallels to Cohen's successful endeavors at Chewy. However, Gill's actions have sparked concerns regarding potential stock manipulation allegations, with a lawsuit filed accusing him of engaging in a "pump and dump scheme" concerning GameStop. The ongoing developments surrounding Gill's investments and their impact on stock prices continue to attract attention and scrutiny within the financial community.