Keith Gill, known online as “Roaring Kitty,” made a surprising move on Monday by disclosing a 6.6% stake in Chewy, marking his first notable investment beyond GameStop. This development has drawn attention due to the link between the two companies: Chewy’s founder, Ryan Cohen, now leads GameStop as CEO. Gill, who gained prominence for driving GameStop’s stock surge in 2021 through social media posts, has previously praised Cohen on his platforms. Cohen, the billionaire founder of Chewy, sold the company in 2017.
The revelation of Gill’s investment in Chewy has sparked concerns among the pet products company’s executives regarding potential volatility driven by Gill’s large following of retail investors. According to a source familiar with Chewy’s perspective, there is apprehension about institutional shareholders being deterred by the stock’s fluctuation.
Following Gill’s disclosure, Chewy’s shares initially surged to $30 on Monday but later retreated amidst volatile trading, closing down 4.8% at $25.92. Gill’s acquisition of 9 million Chewy shares, valued around $245 million based on Friday’s closing price, positions him as the company’s third-largest shareholder, as per LSEG data.
It remains unclear whether Gill financed his Chewy stake by liquidating any holdings in GameStop, where he owns 9 million shares valued at approximately $262.1 million as of mid-June. Despite GameStop’s shares declining by 6% on Monday, they have shown a 33% increase since the beginning of the year.
Requests for comments from the Securities and Exchange Commission (SEC), Chewy, and Gill went unanswered.
While Gill typically discloses his investments through social media, the SEC filing for Chewy was mandatory due to his stake exceeding 5% of the company’s outstanding shares. The filing revealed Gill’s purchase of Chewy shares on June 24, preceding a social media post featuring a puppy that briefly boosted Chewy’s stock price and also impacted shares of Petco and Wag.
In a separate development, Gill faces a lawsuit from GameStop investors accusing him of participating in a “pump-and-dump” scheme. Gill has refuted these allegations, emphasizing that his investing approach, while successful for him, may not be suitable for all investors.
Keith Gill, once an ordinary office worker, gained widespread attention for his enthusiastic promotion of GameStop stock through memes and lively YouTube streams. He became known for his trademark red pirate bandana and attracted a wave of retail investors that significantly impacted hedge funds betting against GameStop.
In his recent SEC filing, Gill maintained his distinctive style by including a humorous section declaring, “I am not a cat,” a nod to his online persona.
Gill’s advocacy for GameStop has centered on its undervaluation and his confidence in the leadership of Ryan Cohen, whom he admires and has publicly supported in his efforts to reshape GameStop’s strategy towards e-commerce.
Ryan Cohen, who transitioned from Chewy to GameStop’s leadership in 2021, has not commented on Gill’s investment in Chewy.
Chewy’s board, meanwhile, has not been in direct communication with Cohen, according to insider sources at the company.
Chewy’s stock has seen a 15% rise in 2024 after three years of decline following a post-pandemic surge in pet spending. Trading activity in Chewy’s options has been unusually high, with daily volumes significantly exceeding previous averages, particularly in call options betting on the stock surpassing $30 by mid-July.
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