What happened

Revolve Group (RVLV 2.24%) stock is in freefall today -- but the selling actually started yesterday.

Shares of the online fashion retailer are down 12.5% as of 1:10 p.m. EDT Friday after TheFly.com reported the sale of a 4 million-share "block" of Revolve stock last night. According to the market watcher, someone offered to sell the shares at any price ranging from $19.50 to $19.70 -- and the shares ultimately did sell this morning for $19.50.

Glowing red stock chart arrow trending down

Image source: Getty Images.

So what

Now, $19.50 is less than the $20.10 share price Revolve stock closed at Thursday, so it's understandable that the share price would sink today after the sale was announced. What's curious about this is that as of today, Revolve shares are actually trading even farther below Thursday's closing price -- trading for less than $18 per share, in fact.

Why might that be happening? According to Yahoo! Finance data, there are currently fewer than 16 million shares of Revolve Group outstanding. Relative to that number, a sale of 4 million shares makes it sound like someone is cashing out of 25% of all Revolve stock in existence -- which would seem to be a pretty sizable vote of no confidence in the stock.

Even absent any other negative news on the stock (and there is none, or at least none yet made public), it's understandable that seeing this might spook investors.

Now what

In actual fact, however, it turns out that that Yahoo! Finance number is based on old data, and Revolve's total shares outstanding is closer to 69.5 million shares (according to the latest data from S&P Global Market Intelligence). Granted, 4 million shares sold out of 69.5 million total is still a pretty sizable event -- but it's closer to 6% of shares being cashed out than 25% -- and correspondingly, less of a reason to panic.