Chewy stock fluctuates as Roaring Kitty reveals $245 million stake

Chewy shares surge then drop as Keith Gill reveals big stake, making him third-largest shareholder. Meme stock frenzy continues.

Chewy shares saw a 9% increase at the opening bell, only to later decline after Keith Gill, also known as "Roaring Kitty," revealed a significant stake in the company. The well-known meme-stock trader disclosed a 6.6% ownership in Chewy, making him the third-largest shareholder according to a recent SEC filing. This move caused the stock to drop by as much as 7% during the trading day.

Despite the initial excitement surrounding Gill's investment, Mizuho Securities warned that Chewy's valuation is now at a premium, trading at over 20 times EV/EBITDA. The firm suggested that investors consider using the recent surge as an opportunity to exit their positions.

Gill's history of sparking meme stock rallies, such as with GameStop earlier this year, has not been without controversy. He recently faced a lawsuit alleging that he participated in a "pump and dump" scheme for personal gain. Despite this, Gill remains a significant player in the meme stock world, holding over 9 million shares in GameStop as of mid-June.

In a nod to his previous viral moment during congressional hearings, Gill included the statement "I am not a cat" in his SEC filing. This reference adds a touch of humor to the serious business of investing and trading in meme stocks.