Roaring Kitty dumps Chewy stake, which could 'de-meme' the stock

Investing.com -- Keith Gill, the influential retail investor known as Roaring Kitty, has exited his entire position in pet products retailer Chewy (NYSE:CHWY), according to a filing with the U.S. Securities and Exchange Commission on Tuesday.

Chewy shares fell around 1.7% in premarket trading on Wednesday.

Gill, widely recognized for his pivotal role in the GameStop (NYSE:GME) saga of 2021, first disclosed a 6.6% stake in Chewy in July.

The announcement at the time spurred speculation about increased volatility in Chewy’s stock due to Gill’s large following of retail investors.

Mizuho analysts said in a brief note that the exit of Gill could trigger short-term market noise and concerns about retail selling pressure but they view the development positively.

"We view this as a potential 'de-meming' of shares," Mizuho said.

Chewy, an e-commerce platform focused on pet food and supplies, became Gill’s first significant stake beyond his highly publicized investment in GameStop.

Known for his posts on YouTube and Reddit (NYSE:RDDT), Gill teased the Chewy investment by posting a photo of a dog on his X (formerly Twitter) account just days before his initial disclosure.

While his involvement sparked excitement among some investors, it reportedly raised concerns within Chewy’s leadership about the potential impact of increased stock volatility on institutional shareholders.

Mizuho analysts believe that Gill selling the stake in Chewy could restore stability to the stock by reducing speculative trading fueled by his retail followers.