Keith Gill, aka Roaring Kitty, dissolves the holdings in Chewy

Filings with the U.S. Securities and Exchange Commission in July showed Gill acquired 6.6 percent of the company’s stock after hinting at investments using photos of dogs on the social media platform X.

Gill became widely known in 2021, when he rallied private investors around GameStop. At the time, the video game retailer was struggling to survive — and major Wall Street hedge funds and major investors were betting against it, or shorting shares. But Gill and those who agreed with him changed GameStop’s trajectory by buying thousands of shares, despite almost all accepted numbers telling investors the company was in serious trouble.

GameStop and Chewy share a common bond with Ryan Cohen. He founded Chewy in 2011 and stepped down as CEO in 2018. Gill saw in Cohen the potential to save GameStop, where he is CEO.

Since then, other meme stocks have emerged, one of the best known being Trump Media & Technology Group Corp.

Trump Media this week surpassed the market value of Elon Musk’s social media platform X, both because that company’s value has collapsed under Musk and because of extremely volatile trading in Trump Media, which uses the ticker symbol “DJT.”

Meme stocks were a novelty during the pandemic, but today, like it or not, they have become a reality, rising and falling based on little other than momentum and investor enthusiasm. Trump Media’s shares have more than doubled in 2024, although the company’s losses are rising exponentially every year and its debt continues to rise.

In a filing late Tuesday with U.S. regulators, Gill revealed that he had liquidated his entire stake in Chewy, at one point more than 9 million shares, making him the company’s third-largest stakeholder.

As with other Gill investments, he had dropped potential hints about X. In early September, he posted an image from the “Toy Story” film series of a child dropping a toy with a dog’s face on its head. Chewy uses dogs in many of its marketing materials.

Gill has not posted to the account since.

In its most recent quarter, Chewy exceeded Wall Street’s earnings expectations and grew revenue 2.6 percent. Shares are up nearly 13 percent this year, which is better than the Dow Jones Industrial Average but well below the S&P 500’s year-to-date gain.

Industry analysts have raised their expectations for Chewy’s earnings, with most expecting revenue growth to accelerate next year.

Meme stock companies have traded more shares in the market than in 2021, which could reduce the likelihood of a so-called “short squeeze.”

A short squeeze is a relatively rare event that can produce eye-popping profits for those riding the wave. When investors bet that a stock’s price will fall in the future, they “short” the stock by borrowing shares and selling them. Later, if the price does indeed fall, the short sellers can buy the shares, return the borrowed shares and pocket the difference.

GameStop had about 305.9 million shares on the market in March, more than four times the number of shares in March 2021. That means it’s harder to move stocks like GameStop on momentum alone.

Such a short squeeze likely contributed to GameStop’s electrifying rise in 2021, but SEC staff said it was a small portion of overall purchases and that GameStop’s shares remained high even after short sellers exited their trades .

If you want to take a chance on meme stocks like Trump Media, you’ll have to put in the work and hope others share your enthusiasm.

Shares rose 4 percent on Monday, 8 percent on Tuesday and more than 20 percent on Wednesday.

Stocks are still positive this week and if they stay that way, it would mark a six-week winning streak. But for a seven-week period from late July to early September, the stock fell every week.

That said, shares in Trump Media are up 130 percent this year and appear to rise and fall with the ups and downs of his campaign, but few industry analysts see a reason to make the investment based on economic fundamentals to risk.