Shares in online pet retailer Chewy (NYSE:CHWY) rose sharply in Monday premarket trading after stock influencer Keith Gill revealed a 6.6% stake in the company. However, the stock has since given up those gains to trade notably lower.
The stock was down more than 5% at the time of writing.
This disclosure, filed with the U.S. Securities and Exchange Commission (SEC), follows a cryptic social media post by Gill featuring a picture of a dog, which led to a surge in Chewy's shares to nearly a one-year high last Thursday.
Gill, also known as “Roaring Kitty,” played a pivotal role in the 2021 meme-stock frenzy. He made headlines last month after sharing a screenshot on Reddit showing his substantial position in GameStop (NYSE:GME) stock and options.
Notably, GameStop CEO and Chairman Ryan Cohen is the founder of Chewy. Recent speculation has suggested Cohen might use GameStop’s newfound wealth from the Roaring Kitty-driven stock surge to acquire a stake or all of Chewy.
Chewy, 70% owned by BC Partners, now has a market cap of over $11 billion.
BC Partners recently sold over $660 million in Chewy stock, with part of the stock sale occurring after Gill's cryptic social media last week. The company bought back $500 million of the BC Partners stock sold, but the other stock is unaccounted for and could have been sold to retail traders buying on the Gill speculation. Today's move in the stock has traders asking if BC Partners used the morning strength in the stock to sell more to retail traders.
BC Partners declined to comment on Gill's Chewy stake, and Chewy has not responded to a request for comment.