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