Chewy Shares Surge Following S&P MidCap 400 Inclusion

Shares of Chewy (NYSE:CHWY) soared by 8.2% on Monday after the announcement that the pet e-commerce company will join the S&P MidCap 400 index.

Chewy is set to replace Stericycle Inc. (NASD: NASDAQ:SRCL) in the index effective before the opening of trading on Wednesday, November 6, according to a press release from S&P Dow Jones Indices.

Stericycle’s removal from the S&P MidCap 400 results from Waste Management Inc. (NYSE: WM) completing its acquisition of the company.

This swap elevates Chewy's position within the Consumer Discretionary sector of the MidCap 400, where it is anticipated to attract new institutional interest and increased trading volume.

Chewy’s inclusion comes after prominent retail investor Keith Gill, known as “Roaring Kitty,” exited his entire position in Chewy. Gill's initial investment in Chewy, disclosed in July, garnered attention due to his involvement in the GameStop (NYSE:GME) saga of 2021, prompting speculation about potential volatility due to his large retail following.

However, Mizuho analysts indicated last week that his exit might “de-meme” Chewy shares, potentially reducing speculative trading and restoring stability.

Chewy, which is recognized for its e-commerce platform designed for pet owners, now finds itself in a favorable position for growth within the index. Mizuho analysts have previously suggested that Chewy could benefit from a more stable shareholder base following Gill’s departure, making the S&P MidCap 400 inclusion timely for investors seeking a more predictable performance from the stock.