Image courtesy of 123rf.com
The stock market experienced unexpected turbulence Monday as Keith Gill, better known by his online persona “Roaring Kitty,” disclosed a significant stake in pet retailer Chewy Inc (NYSE: CHWY). This move comes amid a reignited interest in so-called “meme stocks” and their potential for sudden price movements and increased volatility.
Key Player in GameStop Short Squeeze Acquires 6.6% of Chewy, Becomes Third-Largest Shareholder
According to an SEC filing, Gill has acquired over 9 million shares of Chewy, amounting to a 6.6% stake in the company. This makes him the third-largest shareholder, with the stake valued at more than $245 million based on Friday’s closing price.
The filing also included a humorous touch, with Gill checking a box stating “I am not a cat,” a reference to his previous congressional testimony.
Chewy’s stock initially rallied 9% on the news but quickly reversed course, falling into negative territory. As of 10:27 AM EDT, Chewy’s stock was trading at $25.85, down 5.10% for the day.
The company’s market capitalization stood at $11.25 billion, with a price-to-earnings ratio of 143.37, indicating a potentially overvalued stock.
Gill Continues to Back Ryan Cohen-Influenced Firms
Gill’s investment in Chewy suggests a continued interest in companies associated with Ryan Cohen, the founder and former CEO of Chewy, who is now leading a turnaround effort at GameStop (NYSE: GME) as its CEO. This connection has not gone unnoticed by the market, with GameStop’s stock also experiencing volatility in the wake of the news.
As of 10:26 AM EDT, GameStop’s stock was trading at $23.17, down 6.16% for the day. Despite the day’s losses, the company has seen a year-to-date return of 32.40%, outperforming the S&P 500‘s 14.53% gain. However, with a price-to-earnings ratio of 308.62, concerns about overvaluation persist.
Gill’s move from GameStop options to Chewy shares might indicate a shift in investment strategy, though it remains unclear if he sold his GameStop position to fund the Chewy purchase.
More By This Author:
The $3 Trillion Club Only Has 3 Stocks: Which One Is Likely to Break $4 Trillion First?
Uber and Lyft Stocks Gain as Massachusetts Settlement Provides Clarity
Nike Stumbles As Gloomy Forecast Sends Shares Sprinting Downward
Comments
Log in or sign up to join the conversation.