Chewy stock takes a meme stock ride as ‘Roaring Kitty’ trader reveals stake

The stock price of online pet retailer Chewy hit a sharp rise Monday after one of the Internet’s most-followed investors revealed he had bought shares in the company.

Chewy shares initially jumped 11% but have since turned negative, trading down 6% in midday trading Monday.

The turmoil comes after Keith Gill, the leader of the “meme stock” movement known online by his name “Roaring Kitty,” revealed that he had acquired a large stake in the company.

Gil had predicted Chewy’s acquisitions in a post on X last week that was just a dog emoji.

Shares of Chewy — as well as other stocks in the pet business — immediately rose after the post was published on Thursday.

A Securities and Exchange Commission filing on Monday showed that Gill bought stock worth about $245 million, or about 6.6% of the entire company at Friday’s closing price. Gill also mocked his own version of the SEC’s standard filing form 13G by adding a section stating “not a cat.”

Gill gained notoriety in 2020 after becoming the de facto leader of a populist online movement to buy up stocks in traditional companies like GameStop, AMC, and Bed Bath and Beyond, with the stated goal of trying to turn the companies around. But the movement didn’t quite succeed — though it did create losses for investors who were actively betting against the companies.

But his business was also under scrutiny.

Gill now faces a new class action lawsuit filed in Brooklyn alleging that his most recent trades in GameStop stock were a “pump and dump” scheme.

The plaintiff, Martin Radev, a Nevada resident who represents a class of other GameStop investors, alleges that Gill intentionally used his large and influential platform to “buoy up” the company’s stock price this year by posting online while failing to disclose that he had taken shares. Obtaining a new position in the company. The lawsuit alleges that Gill then successfully sold his shares for a profit.

GameStop’s stock price is still higher than it was before Gill’s involvement but has fallen from its peak by about 50%.

They fell 5% in Monday trading.

In a twist, GameStop is now run by Ryan Cohen, who also co-founded Chewy. Cohen helped fuel the meme stock surge after revealing that he took a large position in GameStop in 2020, several months after Gill first began posting about his position.

Cohen is no longer associated with Chewy’s administration, and it is not clear whether there is any relationship between him and Gill. Cohen’s attorney did not immediately respond to a request for comment.

Secretary of State for Massachusetts, where Gill resides, It is also investigating GameStop trading.

Gill did not immediately respond to a request for comment.