Finance
Chewy jumps after trader Roaring Kitty posts a picture of a cartoon dog
A photo illustration of the Chewy logo can be seen on a smartphone and a PC screen.
Pavlo Gonchar | SOPA images | Light rocket | Getty Images
Tough Shares rose dramatically on Thursday after meme stock leader Roaring Kitty posted a photo on social media platform
Roaring Kitty, whose legal name is Keith Gill, has fueled trading in speculative names like GameStop by posting cryptic images and memes online. On Thursday afternoon, a photo of a cartoon dog appeared on his X-feed, briefly sending Chewy’s shares up as much as 34% to $39.10.
The stock fell back into negative territory later during Thursday’s session, closing the day down 0.3%.
There is also a strong connection between meme stock GameStop and Chewy. GameStop CEO Ryan Cohen was the founder and CEO of Chewy, who was instrumental in Chewy’s acquisition by PetSmart in 2017 and its subsequent initial public offering in 2019.
Cohen joined GameStop’s board of directors along with two other Chewy executives in January 2021, partially helping fuel the initial GameStop rally. He later took over as CEO of GameStop in 2023 and led a turnaround at the brick-and-mortar video game retailer.
Stocks in pet stores like Chewy and Petco saw big spikes during the pandemic, as stuck-at-home consumers adopted cats and dogs in droves. With the adoptions came the purchases of needed accessories, such as new beds and leashes for their furry family members.
But as the pandemic ended and people began venturing outside again, adoption rates slowed and consumers had less need for discretionary pet items like toys and cages, which offer higher profit margins than pet food.
Over the past year, Chewy and Petco have seen consistently strong pet food sales, but sales for higher-margin categories have declined.
Gill is a former marketer for Massachusetts Mutual Life Insurance. He came into the spotlight after successfully encouraging retail investors to buy GameStop stock and call options in 2021 to squeeze out short-selling hedge funds. The 2021 mania led to a series of hearings in Congress in which Gill probed the practices of brokers and the “gamification” of retail.
