Chewy (NYSE:CHWY) got a major boost on Monday after stock influencer “Roaring Kitty,” also known as Keith Gill, disclosed a 6.6% stake in the online retailer of pet food and other pet-related products. However, CHWY stock was declining in trading on Monday.
Details of “Roaring Kitty’s” Stake
The SEC filing, listing Keith Gill as the reporting person, included a section “Check the appropriate box to designate whether you are a cat,” where “I am not a cat” was checked. Furthermore, the SEC filing showed Gill owned 9 million shares of Chewy, worth about $245 million at CHWY’s closing price of $27.24 on Friday. According to a Reuters report citing LSEG data, this stake makes Gill the third-largest shareholder in CHWY.
According to the TipRanks Ownership tool, more than 60% of CHWY’s stock is held by Institutional investors.
Why Could Gill Be Interested in CHWY?
According to a Reuters report, Gill’s interest in Chewy could be due to the fact that the company was founded by GameStop CEO Ryan Cohen. Last week, Gill sent Chewy (NYSE:CHWY) and pet care provider Petco (NASDAQ:WOOF) on a wild ride after posting a picture of a dog on the social media site X.
It’s also worth noting that both stocks have fairly high short interest, with Chewy at 14.9% of the total float and Petco at 22.4%. Short interest is a market indicator reflecting the total number of shares sold short and remaining outstanding.
Short selling involves borrowing a stock you believe will decrease in price, selling it, and later buying it back at a lower price than it was initially sold for, then returning it to the broker, intending to profit from the price difference.
Is CHWY a Good Stock to Buy?
Analysts remain cautiously optimistic about CHWY stock, with a Moderate Buy consensus rating based on 14 Buys, seven Holds, and one Sell. Over the past year, CHWY has declined by more than 25%, and the average CHWY price target of $25.93 implies a downside potential of 4.3% from current levels.
