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Chewy stock rises 10.6% due to new meme status and promptly loses it

Chewy was a meme stock for a moment.

Tough (CHWY -6.23%) has almost achieved meme status this week. The stock skyrocketed after Keith Gill, aka Roaring Kitty, posted a picture of a dog. Yes, that’s it! But that’s how memes start.

According to data from S&P Global Market Intelligence, shares rose as much as 10.6%, especially on Thursday, but then gave up most of those gains. As of 3 p.m. ET on Friday, the price was only up 5.3% for the week.

The meme begins

On Thursday, Roaring Kitty posted a picture of a dog and shares rose. Since his return to social media, traders have been trying to figure out what stock he will buy next and whether it will achieve meme status. GameStop did.

However, there is no evidence that he bought Chewy or that the stock would become the next popular meme, so shares fell back to about where they were at the beginning of the week.

Memes are not what they used to be

During the pandemic, there were huge price moves in companies involved in meme trades. There were short squeezes, and both retail investors and hedge funds built and unloaded huge options positions. But the magic of meme mania has no staying power in the current market.

The attempt to meme-trade Chewy this week was extremely brief, and that’s why the stock fell again. That’s not to say the company is better or worse than it was a week ago. It’s just not getting caught up in wild trading activity right now.

Travis Hoium does not own any stocks mentioned. The Motley Fool owns and recommends Chewy. The Motley Fool has a disclosure policy.

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