What happened

Shutterfly (SFLY) investors have had an eventful week -- heck, they've had an eventful two days!

On Tuesday, the photos-by-mail company announced Q4 sales and "adjusted EBITDA" below Wall Street estimates, gave weak guidance, and topped it all off with an announcement that CEO Christopher North will be departing the company at the end of August. Investors responded to the slew of bad news by selling off Shutterfly stock by as much as 13% in early trading, but the stock settled down to close the day down only 3%.

But today, Shutterfly's stock price is actually up -- and indeed, trading above what it cost before all the bad news broke.

Woman whispering to a man whose mouth is wide open in surprise.

Psst! Did you hear? Shutterfly could be for sale. Image source: Getty Images.

So what

What's up with that? I think you have to thank Aegis Capital for Shutterfly stock's price rebound. Yesterday, Aegis recounted all the bad news that Shutterfly had just released, but then came to the contrarian conclusion that "the best bet for investors is to hang onto the shares in anticipation of an acquirer stepping in."

Shutterfly has formed a Strategic Review Committee to consider "strategic alternatives" that may include a sale of the business. Aegis estimates that should such a sale occur, a financial acquirer -- i.e., a private equity fund -- might pay as much as $60 for this stock, while a strategic acquirer -- someone looking to turn Shutterfly into an operating subsidiary -- could pay as much as $70.

Now what

Granted, no sale may ever take place. Shutterfly itself cautions that "there can be no assurance that the review of strategic alternatives will result in a transaction or other outcome." That being said, Shutterfly has confirmed that it has been "approached by a third party about the potential acquisition of the Company," and that Shutterfly, in turn, "subsequently engaged with several additional third parties regarding a potential acquisition of the Company."

While no firm proposals have been received as of yet, the possibility that Shutterfly stock, currently selling for less than $48, might eventually sell for a 25% or greater premium, seems likely to keep investors hanging around -- at least until all these hopes get dashed.

Check out the latest Shutterflyearnings call transcript.