Why Blue Apron Holdings Soared as Much as 38.1% This Week
Shares of Blue Apron Holdings (NYSE: APRN) soared as much as 38.1% this week, according to data from S&P Global Market Intelligence. Without any official news releases from the company, it is hard to say what drove up Blue Apron's stock price. However, with high short interest and the resurgence of the meme stock craze, it is possible that a short squeeze caused Blue Apron's shares to rocket violently higher. As of 12:46 p.m. ET on Friday, the stock is up 34.1% since last Friday's close.
Blue Apron didn't publish any official news or major filings with the Securities and Exchange Commission (SEC) this week, so investors were not reacting to any fundamental changes to the underlying business. So what caused this huge price bump? It is most likely the market dynamics of a highly shorted security.
According to Yahoo! Finance, approximately 23% of Blue Apron's float (shares that are publicly traded) were sold short as of the end of July. If a heavily shorted stock starts to trade higher, these short-sellers will typically get out of their trades to avoid major losses. To get out of a trade, short-sellers are required to buy back the shares they sold short, which can create even more upward pressure on a stock price.
Source Fool.com
