Beleaguered teen retailer Abercrombie & Fitch on Wednesday surprised Wall Street by posting its first quarterly same-store sales gain in roughly four years.
The company’s shares shot some 10 percent higher in premarket trading, before reversing, a move some analysts attributed to activity by short sellers. Those investors identify stocks that they expect to fall, borrow the shares and sell them to repurchase later when the price drops. The goal is to profit on the price difference.
Because Abercrombie’s results topped expectations, analysts suggested that many of these investors abandoned their bets that the stock would go lower.
The stock’s wild swings, which continued into late morning (where the shares wavered between positive and negative territory up to that point), mimicked the sentiment surrounding the once high-flying brand.