The feline-monikered meme stock disruptor Roaring Kitty appeared to use up another of his nine lives this week as he looked to have seen off a lawsuit while disrupting not one but two retail stock prices.
Popular stocks influencer Keith Gill – whose previous exploits were brought to life by the movie Dumb Money – had been facing a lawsuit accusing of him in engaging in a so-called ‘pump and dump’ scheme involving GameStop Corp. shares.
And Gill, of course, has history with this particular stock as amateur traders mobilized on platforms including Reddit three years ago to boost shares in the games retailer, with their bids triggering an extraordinary and volatile surge in GameStop’s stock market value. That left hedge funds and professional investors that had shorted against the company holding substantial losses.
In doing so, Gill amassed more than a million followers across his Roaring Kitty YouTube channel and Reddit page before going to ground, but he then re-emerged in May of this year.
This time round, a proposed class action that was filed last week in Brooklyn, New York’s federal court by GameStop shareholder Martin Radev was dropped within just days of its filing after he had initially sued Gill for securities fraud, claiming that he had sought to manipulate the stock for his own gain.
In a court filing late Monday afternoon, Radev announced that he was voluntarily dismissing the lawsuit although it remains unclear why – although it should be noted that he is free to file the suit again should he wish.
Roaring Kitty Buys Into Chewy
As if one disruption wasn’t enough, also on Monday of this week shares of online pet food and merchandise retailer Chewy rose 15% pre-market before falling sharply after a filing showed that Gill had picked up a 6.6% stake in the business. Previously he had posted a cryptic image of a puppy on social media platform X. Shares spiked just short of $30 as retail investors got wind, before falling back to just over $24 later in the week.
Shares have rallied slightly this year but are off over 36% over the past 12 months.
Overall, the Chewy filing showed that Gill now owns nine million shares in Chewy, worth in the order of $216 million at the stock’s current price, making Gill Chewy’s third-largest shareholder, according to LSEG data.
Gill has specialized in picking out retailers operating in categories that have struggled. GameStop had been shorted originally because of the huge migration of gaming sales and hardware to streaming and online but Gill’s personal investor revolt saw the company’s stock price surge more than 1,700% during one fraught period in January 2021.
And while Chewy is on a far better footing and continues to trade successfully, it has had to face challenges in the aftermath of the the huge increase in pet ownership during the pandemic, as new pet sales and product volumes returned to more normal levels.
While Gill’s exploits have not generated those unprecedented surges in value or thrown the market into turmoil this time around, some analysts suggested last week that Gill’s focus on Chewy could, in part, be influenced by the fact that the retailer was founded by GameStop CEO Ryan Cohen.
That one should keep the conspiracy theorists busy.
As in 2021, no doubt as a result some of America’s well known retailers will be looking anxiously at their stock market charts, wondering who might be the next meme stock to blow up.
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