Why Did Cava Stock Jump Higher on Tuesday?
Shares of Mediterranean restaurant company Cava Group (NYSE: CAVA) jumped on Tuesday. As of 12:40 p.m. ET, Cava stock was up almost 17%, and the reason why isn't immediately apparent.
What investors do know is that today is the expiration of Cava's lock-up period. And investors have also observed unusually high trading volume today. Here's what these two things mean.
When Cava went public in June, it had over 111 million diluted shares outstanding. However, only 14.4 million shares were available for trading -- just 13% of the total. The end result is that the stock was more illiquid than it otherwise would be. Small increases in buying pressure or selling pressure can lead to larger-than-expected volatility in the share price.
Source Fool.com
