What happened

Shares of Asana (ASAN -7.10%), the workflow solutions software company, were climbing today as the tech stock continued to rally following last week's smashing second-quarter earnings report and news that CEO Dustin Moskovitz was buying $350 million in stock. Though that news came out last Wednesday night, it seemed to continue squeezing short sellers today as the stock gained for the third consecutive session.

As of 1:45 p.m. ET, Asana stock was up 10.5%.

So what

In a press release last Wednesday evening, Asana said it had sold $350 million to Moskovitz in a private placement, raising money for the company for working capital and general corporate purposes. Not only does that move indicate the CEO's confidence in the stock, it also gives Asana a valuable cash infusion to help fund its growth.

As of mid-August, 17.5% of the stock's float was sold short, so it's vulnerable to short squeezes on good news. In fact, short sellers seem to be closing out their bets as the percentage of shares sold short fell to its lowest point since January last week.

Asana also blew past estimates in its second-quarter earnings report last week. Revenue jumped 51% to $134.9 million, ahead of expectations at $127.2 million, and on the bottom line, the company's adjusted loss per share expanded from $0.23 to $0.34, but beat the consensus at a per-share loss of $0.39.

The company's guidance for the third quarter was slightly ahead of the Wall Street view as it sees revenue in the current quarter increasing 38%-39% to $138.5 million-$139.5 million.

Now what

Asana is still significantly unprofitable, and Wall Street has turned skeptical of unprofitable growth stocks. That explains why the stock is down more than 80% from its peak last year, and why the stock has attracted considerable interest from short sellers.

Still, the workflow software stock is delivering strong top-line growth and the funding from Moskovitz, who was one of Facebook's co-founders, should help allay concerns about cash burn after the company just lost $41.6 million in free cash flow in the second quarter. There's room for the stock to run higher from here.