Source: Wall Street See
Chewy's stock price has experienced unusual movements due to Keith Gill, the 'retail investor leader', posting a cartoon image of a dog on social media X that is quite similar to Chewy's logo. However, as of Thursday's close, Chewy has given up all its intraday gains. It is worth noting that there is a close connection between Keith Gill's representative work, GME, and Chewy.
On Thursday, the stock price of online pet food retailer, with large cap, soared more than 34% at one point, marking the largest intraday gain since June 2019 and also hitting a new intraday high since July last year.$Chewy (CHWY.US)$The stock price soared more than 34% at one point during the day, marking the biggest intraday gain since June 2019 and hitting a new intraday high since July last year.
Chewy's stock price rose due to a 'retail investor leader' Keith Gill posting a picture of a cartoon dog on social media X, which is quite similar to Chewy's logo image. Gill's nickname on Reddit is DeepF-Value, and on YouTube and X it is Roaring Kitty.
Petco Health & Wellness Co Inc. (WOOF) and GameStop (GME) also appeared to have made significant gains, rising more than 12% and 10%, respectively.
However, Chewy's spike is short-lived. As of Thursday's close, the stock had given back all of its gains and was down 0.31% slightly. Petco also gave back all of its gains and closed up 0.3%. GME's gains narrowed significantly and closed up 3.7%.
It should be noted that there is a close relationship between 'retail investor leader's' flagship work GME and Chewy. GME CEO Ryan Cohen is the founder and CEO of Chewy, and he facilitated PetSmart's acquisition of Chewy in 2017 and subsequently its IPO in 2019.
Cohen joined GME's board of directors with two other Chewy executives in January 2021, which to some extent contributed to the initial surge in GME's stock price. In 2023, Cohen took over as GME's CEO, leading the transformation of this physical electronic game retailer.
During the COVID-19 pandemic, consumers who stayed at home adopted a large number of cats and dogs, and pet retailers such as Chewy and Petco saw a significant increase in their stocks. After adopting pets, people buy necessary accessories for new family members such as new beds and leashes for cats and dogs.
However, as the pandemic ends, the number of people adopting pets has slowed down, and the demand for toys and cages has decreased. For pet retailers, the profitability of these categories is higher than that of pet food. Over the past year, Chewy and Petco's pet food sales have remained strong, but revenue from high-profit categories has declined.
Steve Sosnick, chief strategist at Interactive Brokers LLC, believes that 'conventional news' would not have caused such a large stock price fluctuation, but 'a picture of a dog' led to the rise in stock price.
Editor / jayden