Why Did Trivago Stock Jump 20% on Thursday?
What happened
Shares of online hotel-search platform Trivago (NASDAQ: TRVG) rose as much as 20.7% on Thursday. The stock is up about 17% at the time of this writing.
There doesn't seem to be any material news driving the stock's move, as there were no company press releases or SEC filings on Thursday. But the stock's sharp increase does follow a significant pullback in its share price recently, suggesting the stock's gain could represent some investors potentially trying to take advantage of the lower stock price.
Or, here's another possible reason: Trivago stock's short interest is up considerably from where it was at the beginning of the year, suggesting some investors may be covering their short positions after the stock's huge slide, creating a short squeeze.
So what
Trivago stock is down 59% in the past six months, spurred recently by a plummeting stock price after the company lowered its guidance for full-year revenue significantly. The company's guidance earlier this year for revenue growth of 50% in 2017 has since been lowered twice. Current guidance calls for revenue growth between 36% and 39%.
Now what
It's impossible to know exactly why Trivago's stock moved so significantly on Thursday. But investors should remain focused on the company's underlying fundamentals instead of anchoring to stock price movements.
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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool recommends Trivago. The Motley Fool has a disclosure policy.