Chewy shares ride meme stock surge after 'Roaring Kitty' trader discloses stake

The stock price of online pet retailer Chewy fell sharply on Monday after one of the Internet's most followed investors revealed he had purchased shares in the company.

Chewy shares initially rose as much as 11% but then fell sharply on Monday morning to trade down 3%.

The turmoil began when Keith Gill, a leader of the “meme stock” movement better known online by his handle “Roaring Kitty,” revealed he had taken a significant stake in the company.

Gill foreshadowed Chewy Holdings last week in a post on X that was simply a dog emoji.

Shares of Chewy — as well as other stocks in the pet business — surged shortly after the post on Thursday.

On Monday, SEC filings revealed that Gill had bought shares worth about $245 million, or about 6.6% of the entire company at Friday's closing price. Gill also mocked his version of the standard SEC 13G filing form by adding a section stating that he is “not a cat.”

Gill came into the spotlight in 2021 when he became the de facto leader of an online-populist movement to buy shares of older companies like GameStop, AMC, and Bed Bath & Beyond, with the stated goal of resurrecting the companies. It didn’t quite work out — although the movement did successfully create losses for investors who were actively betting against the companies.

But his business has also been the subject of scrutiny.

Gill now faces a new class action lawsuit filed in Brooklyn alleging that his recent trades in GameStop shares amounted to a “pump and dump” scheme.

The plaintiff, Martin Radev, a Nevada resident representing a class of other GameStop investors, alleges that Gill intentionally used his large and influential platform to drive up the company's stock price this year without disclosing by posting online that he had taken a new position in the company. The lawsuit alleges that Gill then successfully sold his shares for a profit.

GameStop's share price remains higher than it was prior to Gill's post, but is down roughly 50% from its peak.

They were down 7% in pre-market trading on Monday.

The secretary of state in Massachusetts, where Gill lives, is also investigating the GameStop trading.

Gill did not immediately respond to a request for comment.

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