Something crazy happened with $Chewy, Inc.(CHWY)$ 's stock price on Thursday. It shot up over 34% during the day, its biggest intraday gain since June 2019 and a new high since last July.
All because "retail investing guru" Keith Gill, aka DeepF-Value on Reddit or Roaring Kitty on YouTube and X, posted a cartoon dog image that looked a lot like Chewy's logo.
Chewy wasn't alone in this crazy ride. $Petco Health and Wellness Company, Inc.(WOOF)$ also jumped over 12%, and $GameStop(GME)$ spiked over 10%.
But it was all a fleeting moment. By the end of the day, Chewy had given up all its gains and closed down 0.31%. Petco did the same, ending with a small gain of 0.3%. And GME's rally was significantly narrowed, closing up 3.7%.
You know, there's a tight connection between GME and Chewy, thanks to the "retail investing guru."
Ryan Cohen, the CEO of GME, is also the founder and CEO of Chewy. He facilitated PetSmart's acquisition of Chewy in 2017 and its IPO in 2019.
Cohen joined GME's board in 2021 with two other Chewy execs, helping drive its early stock price gains. Now he's leading the physical game retailer's transformation as its CEO in 2023.
During the pandemic, people staying home adopted tons of cats and dogs, and pet retailers like Chewy and Petco soared. New pet parents bought all sorts of accessories for their furry friends, like beds and leashes.
But as the pandemic ended and people went back outside, pet adoptions slowed, and demand for toys and cages fell. And for pet retailers, those products have higher profit margins than pet food.
Over the past year or so, Chewy and Petco's pet food sales have remained strong, but revenues from those high-margin categories have declined.
Steve Sosnick, chief strategist at Interactive Brokers LLC., said "regular news" wouldn't have caused such a huge swing in Chewy's stock price. But "a picture of a dog" did. Crazy, right?
Comments