One of the more interesting movers in the market right now is Blue Apron (NYSE:APRN). Today, APRN stock surged more than 25% to a high of $7.48, with little in the way of news to support the move. However, shares have steadily declined since then. Blue Apron is now up just 2% for the day.
There have been a few catalysts investors appear to have jumped on with APRN stock. For one, the company recently announced the celebration of its 10-year anniversary. Last week, the meal delivery company also added a number of new menu options for customers. These so-called “Add-ons” focus on on-the-go customers, as Blue Apron looks to pick up more market share amid the busy back-to-school season.
Clearly, though, these catalysts aren’t really large enough to drive the kinds of volatile moves APRN stock has seen lately. Indeed, since the beginning of August, shares have more than doubled (as of today’s peak), leading to speculation around their short squeeze potential.
Let’s dive into what investors may want to make of Blue Apron right now.
Can APRN Stock Keep Running Higher?
There are some fundamental reasons why investors are looking at Blue Apron as a short squeeze play right now. Around 36% of the company’s float is sold short. That’s abnormally high, signaling that a coordinated short squeeze from retail investors could be possible.
Chatter in various social media circles has also picked up in recent months, as these sorts of metrics gain attention. As the company’s borrow fee rate took off, the costly nature of shorting this stock led some to suggest that Blue Apron could be poised for the rally we’ve seen.
Now, today’s continuation of this month-long move is impressive. However, the fact that APRN stock gave up all its gains in short order today is worrisome as well. Thus, the question is whether any sort of short squeeze momentum can be maintained.
I’m not so sure. The market is taking a very bearish tone of late, with Federal Reserve tightening increasingly likely. Accordingly, while more rallies are possible, today’s price action suggests profit taking may be preferable for those who have already notched a win with APRN stock.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.