What's going on?

Online pet products retailer Chewy made its stock market debut on Friday � and its shares rose by 60%. Woof woof.

What does this mean?

Chewy raised $1 billion by selling shares to new investors, valuing it at $9 billion. Founded in 2011, Chewy was�gobbled up by retail chain PetSmart (itself owned by private equity investors) in 2017 for $3 billion. PetSmart�s own troubles abounded as customers took to ecommerce and abandoned its stores, leaving it cash-strapped. But Chewy continued to grow: it�s now second only to Amazon for online pet product sales in the US � and had 11 million customers fetching $3.5 billion of revenue last year.


In an atypical move for an ecommerce company, Chewy�s going to use a lot of the cash it raised to pay off some of PetSmart�s debt � as opposed to fueling its own growth. Altruistic perhaps, but Chewy may not have much choice� (tweet this)

Why should I care?

For you personally: Seen but not heard.

The existing Chewy shares owned by PetSmart (and its owner) have significantly more influence than the new shares sold to investors on Friday. New investors � even with a sizable stake � won�t have as much sway over Chewy as they would at other companies. Perhaps Chewy and PetSmart are best left to their own devices � or maybe they�d benefit from more forceful outside counsel. Snap Inc.�s 2017 initial public offering (IPO) sold shares to investors with no voting rights at all � and it subsequently ran into a wall of strategic challenges.

For markets: Joining the club.

Chewy wasn�t the only one biting into stock markets last week: freelancer marketplace Fiverr and Silicon Valley cybersecurity firm CrowdStrike both went public to much investor applause � their stocks rose by 90% and 97%, respectively. And with a wave of cash likely to flow towards recent IPOs as some indexes rebalance and exchange-traded funds follow, investors may be trying to get ahead of future updates by buying up shares in advance.