Chewy stock surges on S&P MidCap 400 inclusion

Investing.com -- Shares of Chewy (NYSE:CHWY ) soared 8.2% on Monday following 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 ) on the index, effective prior to 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 comes as Waste Management Inc. (NYSE: NYSE:WM ) finalizes its acquisition of the company.

The swap will shift Chewy into a prominent position within the Consumer Discretionary sector of the MidCap 400, where it is expected to attract new institutional interest and increased trading volume.

Chewy’s inclusion in the S&P MidCap 400 comes after prominent retail investor Keith Gill, also known as “Roaring Kitty,” exited his entire position in Chewy.

Gill’s initial investment in Chewy, disclosed in July, captured attention due to his role in the GameStop (NYSE:GME ) saga of 2021. His move into Chewy spurred speculation about the potential for heightened volatility due to his large retail following.

However, Mizuho analysts said last week that his exit could “de-meme” Chewy shares, possibly reducing speculative trading and restoring stability.

Chewy, known for its e-commerce platform catering to pet owners, is now in a favorable position for future growth within the index.

Mizuho analysts had previously noted that Chewy might benefit from a more stable shareholder base following Gill’s exit, making the S&P MidCap 400 inclusion timely for investors seeking more predictable performance from the stock.

Source: Investing.com