NEW YORK (AP) — Shares of Chewy fell Monday in volatile trading after a regulatory filing revealed that Roaring Kitty, an investor at the center of the meme stock craze, has taken a 6.6% stake in the online pet retailer.
Roaring Kitty, whose legal name is Keith Gill, bought more than 9 million shares of Chewy last week, the Securities and Exchange Commission filing shows. Based on Friday’s $29.05 closing price, that amounts to a value of over $261 million — making him the company’s third-largest shareholder.
Shares in Chewy jumped more than 20% before the opening bell. But they ended the day down almost 7%.
Chewy, based in Plantation, Florida, did not immediately respond to a request for comment.
Gill tipped his hand last week on his feelings about the company, posting a picture of a dog on social media platform X and sending Chewy’s stock up more than 30% in intraday trading.
Gill made a name for himself in 2021, when he rallied retail investors around GameStop. At the time, the video game retailer was struggling to survive — and big Wall Street hedge funds and major investors were betting against it, or shorting its stock. But Gill and those who agreed with him changed GameStop’s trajectory by buying up thousands of shares in the face of almost all accepted metrics that told investors that the company was in serious trouble.
That began what is known as a “short squeeze,” when those big investors that had bet against GameStop were forced to buy its rapidly rising stock to offset their massive losses.
GameStop saw yet another rally in May — when Gill returned online for the first time in three years.
Gill has said he has faith in the ability of GameStop’s Chairman and CEO Ryan Cohen to modernize the company after what he did at Chewy. Cohen co-founded Chewy back in 2011. He stepped down from his role of Chewy’s CEO in 2018.
But Gill’s resurgence into the meme stock arena hasn’t entirely been smooth sailing. A class action lawsuit filed Friday accuses him of violating securities laws and engaging in a “pump-and-dump scheme” with his recent GameStop purchases. The complaint, which was brought by a GameStop investor who is seeking class-action status, claims that Gill quietly acquired large amounts of stock and call options before boosting prices with his much-anticipated online appearances — resulting in millions in profits for himself through belated disclosures to his followers.
The suit also notes a June 3 story from The Wall Street Journal, which reported that E(asterisk)Trade was considering telling Gill that he could no longer use the platform after concerns around potential stock manipulation. The outlet cited unnamed sources familiar with the matter.
The Associated Press reached out to Gill for statement Monday.
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