Why Blue Apron Holdings Inc. Popped Today

MarketsMotley Fool

What happened

Shares of Blue Apron Holdings Inc. (NYSE: APRN) were moving higher today on an apparent short squeeze. Though there was no news out on the meal-kit provider, the stock was climbing on high volume as short sellers seemed to be moving in to close out their trades after the stock had plummeted sharply last month.

Continue Reading Below

As of 12:03 p.m. EDT, the stock was up 7.6%.

So what

By noon, more than 3.4 million Blue Apron shares already had been exchanged, slightly more than the daily average of 3.36 million. That sort of high-volume surge on a stock like Blue Apron with no supporting news usually signals a short squeeze.

After debuting at $10 last June, the stock touched an all-time low at $1.72 earlier this month as increasing competition and slowing revenue growth have contributed to investor skepticism about the stock. Revenue even fell in its most recent earnings report. However, the company's first-quarter earnings report, which is just around the corner on May 3, presents a potential catalyst for Blue Apron's recovery.

Now what

For bulls hoping for a comeback, I wouldn't read too much into the stock's jump today. Shares have been volatile and will continue to be, as the stock operates in a young industry with an unproven business model. Blue Apron could still possibly turn around its business as new CEO Brad Dickerson is committed to improving margins, or the company could get acquired. However, competition from the likes of Walmart may only squeeze the company further.

10 stocks we like better than Blue Apron Holdings, Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Blue Apron Holdings, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of April 2, 2018

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.