Roaring Kitty's Chewy Stake Sparks Market Volatility

What You Need To Know

Keith Gill, known as "Roaring Kitty," revealed a 6.6% stake in Chewy Inc. (NYSE: CHWY), briefly boosting its shares by 10%. Despite this, Chewy shares ended down 6.6% on Monday. Gill's SEC filing shows he owns 9 million Class A shares worth $229 million.

Chewy's stock has risen 70% since May but is still 79% below its 2021 peak. The company, with high short interest similar to GameStop, saw mixed options trading signals. Increased call volatility indicated bullish sentiment, but high put volume suggested caution.

Ryan Cohen, Chewy's co-founder and GameStop CEO, has ties to both companies. Due to its growth and profitability, experts believe Chewy could be a more stable meme stock.

Why This Is Important for Retail Investors

1. Awareness of high-profile investors like Keith Gill can provide insights into potential market movements and opportunities.

2. Understanding the dynamics between meme stocks like Chewy and GameStop helps retail investors navigate volatile markets.

3. Recognizing the impact of social media influencers on stock prices can aid retail investors in making informed decisions.

4. Recognizing the interconnections between companies like Chewy and GameStop can lead to new investment strategies and opportunities.

5. Monitoring options trading sentiment and implications can help retail investors gauge market sentiment and make more informed trading decisions.

Market Flashback

In early 2021, Keith Gill, known as "Roaring Kitty," became a central figure in the GameStop stock surge. Using social media, Gill rallied retail investors to buy heavily shorted GameStop shares, causing a dramatic price increase and highlighting the power of collective retail trading. This event shook traditional financial institutions and sparked debates on market regulations.

Read What Others Are Saying

Reuters: Chewy executives alarmed at 'Roaring Kitty' stake in pet-product retailer

Bloomberg: Chewy Shares Whipsaw After Keith Gill Reveals $245 Million Stake

Popular ETFs

Some investors prefer to invest in stocks via an exchange-traded fund for ease and reduced risk. Some relevant ETFs include the following:

• ProShares Online Retail ETF (ONLN)

  • Focuses on companies that derive significant revenue from online and virtual retail, providing exposure to the growth of e-commerce.

• Amplify Online Retail ETF (IBUY)

  • Targets online retail companies, offering diversified exposure to the e-commerce industry, including businesses that primarily sell online.

• SPDR S&P Retail ETF (XRT)

  • Provides a broad exposure to the retail sector, including both online and brick-and-mortar retailers.

• Global X E-commerce ETF (EBIZ)

  • Invests in companies positioned to benefit from the increased adoption of e-commerce, covering a wide range of online retail categories.

• VanEck Vectors Retail ETF (RTH)

  • Focuses on leading retail companies, including those with strong e-commerce platforms, offering a mix of traditional and online retail exposure.