Shares of Chewy fell over 4% Monday morning, following an earlier surge in trading for the pet retailer after trader Keith Gill—known online as “Roaring Kitty”—disclosed a 6.6% stake in the company founded by the now-CEO of meme stock darling GameStop.
The meme stock trader is now the third-largest shareholder in the pet retailer.
Chewy shares dropped to over $26 around 10 a.m., after surging as much as 29% in premarket trading.
Gill purchased over 9 million Class A shares in Chewy, a 6.6% stake in the company worth about $251 million as of Monday’s share price, according to a Securities and Exchange Commission filing
Gill is now the third-largest shareholder in Chewy, behind investment management firms Vanguard Group (7.6%) and Baillie Gifford (14.6%), according to FactSet.
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Gill’s disclosure referenced his testimony to Congress in 2021, with a section requiring the reporting person to “designate whether you are a cat,” following two check boxes that read “I am a cat,” and the other—which Gill marked—that says “I am not a cat.” Gill, who testified before lawmakers about his investments in GameStop, opened his address by saying: “A few things I am not, I am not a cat.”
Chewy’s stock has rallied over the last week, after falling by as much as 63% over nearly a year. The company reported a decline in net income in its fourth quarter earlier this year, despite an increase in net sales, though the online pet retailer also reported a decline in active customers. Most of Chewy’s sales are generated from auto-ship orders, chief financial officer David Reeder told investors. Gill, who spearheaded trading interest in Gamestop again this year, raised speculation he was trading in Chewy after posting an image of a cartoon dog on X. That post caused Chewy’s share price to spike as much as 34%, before closing the day down 0.3%.
GameStop CEO Ryan Cohen is the founder of Chewy and aided PetSmart’s takeover of the company in 2017 and its IPO two years later. He joined GameStop’s board of directors—in addition to two Chewy executives—in 2021, and became the video game retailer’s chief executive in 2023. His involvement with GameStop helped drive a massive surge in interest in the company, eventually leading to a 2021 spike in its share price driven largely by retail traders.