What happened

Trivago (NASDAQ:TRVG) stock has been volatile lately, trading between about $6.50 and $11 in the last three months alone. That volatility continued in the last few days, with a particularly large swing on Thursday, when shares popped by as much as 14%. The stock closed the trading session up 13.6%.

Similar to some other recent big moves in the hotel-search platform's stock price, there didn't appear to be any material news to cause this surge. But it's possible there was a more technical driver behind it: a short squeeze.

A traveling woman in a red dress with rolling luggage

Image source: Getty Images.

So what

Trivago shares have plummeted more than 60% in the past six months. The falling stock prices reflect the company's failure to live up to its revenue growth forecasts and its consequent guidance reductions. Given the stock's sharp decline and the high level of short interest, it's possible that shorts are covering their positions ahead of Trivago's fourth-quarter earnings report, which is tentatively scheduled for Feb. 7.

Volatility persisted on Friday, with the stock trading 4.3% lower just past noon.

Now what

Since it's not clear exactly why Trivago stock moved Thursday, investors should be sure to stay focused on the company's underlying fundamentals, rather than anchoring to recent stock price movements. It is the business' performance that will ultimately determine the long-term trajectory of Trivago stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.