The news of meme stock trader “Roaring Kitty,” whose real name is Keith Gill, buying just over 9 million shares of Chewy created quite a stir in the financial market. This move amounted to a 6.6% stake in the pet food e-commerce retailer, making him the third-largest shareholder in the company. The value of his stake, based on Friday’s closing price, exceeded $245 million, causing Chewy’s shares to surge by more than 20% in premarket trading on Monday.
One cannot ignore the significant connection between GameStop and Chewy in this scenario. GameStop CEO Ryan Cohen, who founded and led Chewy, played a pivotal role in PetSmart’s acquisition of Chewy in 2017 and its subsequent IPO in 2019. Cohen’s involvement in both GameStop and Chewy underscores the intertwined nature of these two companies. This connection was further solidified when Cohen, along with two other Chewy executives, joined the GameStop board in January 2021, contributing to the initial GameStop rally.
Keith Gill’s actions in the stock market have not gone unnoticed. Previously known for his advocacy of GameStop and his efforts to rally retail investors behind the stock, he now appears to be diversifying his holdings by acquiring a significant stake in Chewy. Gill, a former marketer for Massachusetts Mutual Life Insurance, has been instrumental in encouraging retail investors to challenge traditional Wall Street practices, particularly those of short-selling hedge funds.
In a recent YouTube livestream, Gill expressed his belief that GameStop is undergoing a reinvention, entering its second stage, and positioning itself as a bet on Ryan Cohen’s leadership abilities. Cohen’s efforts to pivot GameStop towards e-commerce have been lauded by investors and analysts alike, leading to a turnaround in the company’s fortunes. Gill’s faith in Cohen’s vision for GameStop is evident in his continued support of the stock.
Following the news of Roaring Kitty’s investment in Chewy, GameStop shares experienced a 6.5% decline in premarket trading. The market’s reaction to Gill’s strategic move remains uncertain, as investors speculate on the implications for both Chewy and GameStop. Whether Gill sold his GameStop position to fund his Chewy investment is unclear, adding an element of unpredictability to the situation.
The evolving landscape of retail investing, characterized by influencers like Keith Gill and companies like Chewy and GameStop, highlights the shifting dynamics of the financial market. Roaring Kitty’s foray into Chewy underscores the potential for unconventional trading strategies to shape the market’s trajectory. As investors navigate this ever-changing landscape, the connections between companies and key players like Gill and Cohen will continue to influence market dynamics and investor sentiment.