The stock price of Chewy, an online pet food retailer, fluctuated on Thursday due to Keith Gill, the “retail leader,” posting a cartoon dog image on social media X, which is quite similar to the image of Chewy’s logo.
Chewy’s stock price surged over 34% during trading on Thursday, marking the largest intraday increase since June 2019 and a new intraday high since July last year.
Chewy’s stock price fluctuated due to Keith Gill, the “retail leader,” posting a cartoon dog image on social media X, which is quite similar to the Chewy logo image. Gill’s nickname on Reddit is DeepF Value, and her nickname on YouTube and X is Roaring Kitty.
Petco Health&Wellness Co Inc. (WOOF), which rose by over 12% at one point, and GameStop (GME), which rose by over 10% at one point, also experienced changes along with Chewy.
However, Chewy’s rally was an absolute flash in the pan. As of Thursday’s close, the stock has given up all its gains of the day and closed down slightly by 0.31%. Petco also gave up all its gains, closing up 0.3%. The increase in GME has significantly narrowed, closing up 3.7%.
It should be noted that there is a close connection between GME and Chewy, the representative works of “retail investors leading the way”.
GME’s CEO Ryan Cohen is the founder and CEO of Chewy, who facilitated PetSmart’s acquisition of Chewy in 2017 and its subsequent IPO in 2019.
Cohen joined GME’s board of directors in January 2021 along with two other Chewy executives, which to some extent drove up GME’s initial stock price. Cohen will take over as CEO of GME in 2023, leading the transformation of this physical video game retailer.
During the COVID-19 epidemic, domestic consumers adopted cats and dogs in large numbers, and pet retailers such as Chewy and Petco saw their stocks rise sharply. After adopting pets, people purchased necessary accessories for new family members such as cats and dogs, such as new beds and leashes.
However, with the end of the epidemic, people began to go out again, the number of adopted pets slowed down, and the demand for toys and cages decreased. For pet retailers, the profit margin of these products is higher than that of pet food. Over the past year or so, Chewy and Petco’s pet food sales have remained strong, but revenue in high profit categories has declined.
Steve Sosnick, Chief Strategist of Interactive Brokers LLC., believes that “regular news” would not cause such significant stock price fluctuations as Chewy and others, however, “a picture of a dog” drove the stock price up.
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