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What: Shares of fast-growing shipping and supply chain expert XPO Logistics Inc (NYSE:XPO) jumped more than 10% on Nov. 5, following the release of the company's third-quarter earnings report before market open. After today's jump, XPO Logistics' stock has shot up nearly 24% since Oct. 27, the day after shipping competitor United Parcel Service, Inc. (NYSE:UPS) reported worse-than-expected revenues in its third-quarter earnings report. 

So what: For years, XPO Logistics has operated a very different, "asset-light" business than UPS, which owns and operates essentially its entire shipping and logistics operation, while XPO has historically used third parties for much of its work. 

However, a number of major acquisitions this year have changed the face of XPO, turning it into a more vertically integrated shipping company, if nowhere near the size of behemoth UPS. At any rate, UPS reported a 2% decline in revenue in the third quarter, while XPO reported sales growth of 256%. Of course, that huge increase in revenue was due to acquisitions, and not organic growth.

However, unlike UPS' results, which came in below Wall Street estimates, XPO's revenues were slightly better than Mr. Market was expecting. 

Now what: There's a little bit more to the story, of course. 

Since earlier this year when XPO began aggressive acquisitions, the percentage of shares held short has skyrocketed:

XPO Chart

XPO data by YCharts.

This has corresponded with a series of worse-than-expected earnings reports, as well as a fundamental shift in the way the company has historically operated. 

In other words, the combination of uncertainty around the company's ability to pull off a fundamental change in the business, and opportunistic short-sellers betting against management, has pushed the stock way down in recent months. But it's looking like today's not-awful earnings report may have created some optimism, leading some short-sellers to exit their positions, which of course means buying shares to exit short holdings. So probably a little bit of a "short squeeze" happening, and not just optimistic investors. 

Put it all together, and it doesn't really give us any near-term certainty as to what will happen with the share price. It's possible that more short-sellers may choose to exit their positions, which would probably push the stock price higher. It's also possible that some traders may see the recent price increase as a chance to open or add to their short positions. 

In other words, long-term investors should expect continued volatility until there's evidence that management's new strategy is working and the company returns to profitability. As long as there remains uncertainty as to whether they can pull it off -- and that means a few quarters of showing profitable results -- short-sellers are likely to stay in the mix. And while that can mean strong appreciation like we saw today on "good" news, it can also mean sharp declines. 

If you're in for the long haul, be ready to ride out the bumps in the road. Looking for a more in-depth earnings review? Stay tuned -- fellow Fool Dan Caplinger is reporting on that soon. 

Jason Hall has no position in any stocks mentioned. The Motley Fool recommends United Parcel Service and XPO Logistics. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.