What happened

Shares of luxury jewelry company Tiffany (NYSE:TIF) took a hit on Wednesday, falling nearly 6% as of 11:25 a.m. EDT.

The stock's decline was likely prompted by news that JANA Partners LLC, a hedge fund founded by Barry Rosenstein, had sold its entire position in Tiffany.

A chalkboard sketch of a chart showing a stock price falling

Image source: Getty Images.

So what

Activist hedge fund JANA Partners revealed in a 13F SEC filing, filed on Wednesday, that it had sold all 941,895 shares it had in Tiffany during Q2. Given Tiffany's stock price today, the position would have been valued at about $78 million.

In the past JANA has played an active role at the jewelry company, helping bring new people to the company's board of directors. Some investors may consider the fund's sale as a sign that JANA Partners has lost faith in Tiffany's upside potential.

Now what

While JANA's sale is notable, investors should remain primarily focused on Tiffany's fundamentals.

Of course, Tiffany's financials aren't looking great. Earnings per share declined from $1.14 in the company's first quarter of fiscal 2018 to $1.03 in the first quarter of fiscal 2019. Challenges in the period were attributable to "significant foreign exchange headwinds and dramatically lower worldwide spending attributed to foreign tourists," said Tiffany CEO Alessandro Bogliolo in the company's earnings release. But the company notably saw strength in China during the quarter.