Chewy shares experienced a sudden surge in value after Roaring Kitty, also known as Keith Gill, posted a cryptic image on social media platform X that resembled the online pet food retailer’s logo. This is not the first time Roaring Kitty has impacted the stock market, as he has a history of stirring up trading in speculative stocks like GameStop by sharing memes and images online. The image of a cartoon dog shared by Roaring Kitty drove Chewy shares up by as much as 34%, but the gains were short-lived as the stock dropped back into negative territory by the end of the session.
The Connection Between GameStop and Chewy
There is a significant link between meme stock GameStop and Chewy, as GameStop CEO Ryan Cohen was the former CEO of Chewy. Cohen played a crucial role in PetSmart’s acquisition of Chewy in 2017 and its subsequent IPO in 2019. After joining the GameStop board in 2021, along with two other Chewy executives, Cohen contributed to the initial surge in GameStop’s stock price. Following his appointment as GameStop CEO in 2023, Cohen led a successful turnaround of the brick-and-mortar video game retailer.
During the pandemic, pet retailers like Chewy and Petco experienced a surge in sales as consumers adopted more pets and purchased necessary accessories. However, as restrictions eased and adoption rates slowed down, the demand for discretionary pet items such as toys and cages decreased. This shift led to a decline in revenue from higher margin categories, despite steady sales of pet food over the past year.
Keith Gill, a former marketer for Massachusetts Mutual Life Insurance, gained fame for his role in boosting GameStop shares in 2021 and challenging short-selling hedge funds. His actions sparked a wave of retail investor activism and brought attention to issues like brokers’ practices and the perceived “gamification” of retail trading. Gill’s ability to mobilize a large number of individual investors to collectively impact stock prices has drawn both praise and criticism from various quarters.
The volatile nature of meme stocks and the influence of social media personalities like Roaring Kitty underscore the complexities of the modern stock market. Investors should exercise caution and conduct thorough research before making investment decisions based on online trends and influencers.
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