Ocado Group PLC (LSE:OCDO) shares fell as analyst Clive Black at Shore Capital sprinkled some cold water on reports that Amazon might be looking at a bid.
Shore Capital's head of consumer research sent a note to clients after the online grocery group's shares surged on reports about potential bid interest.
Newspapers reported "speculation of bid interest from more than one American suitor", including "technology heavyweights such as Amazon".
Black was clear that he was not aware if there was a bid for or not.
"However, in light of the quite notable share price movement, we would be amazed if the UK Takeover Panel had not been in touch with both Amazon and Ocado to seek clarification as to the veracity of this story line," Black wrote.
"That there was no announcement from either party on the 22 June or on the morning of the 23rd, suggests to us that there was nothing to report and as such other factors must be at play."
Ocado was the biggest faller on the FTSE 100 on Friday, down 7% to 526p, having jumped 32% the previous day as a squeeze on short-sellers was likely to have contributed to the sharp rise, with the Hatfield-based company the most shorted stock in London.
"No doubt some of those investors short of Ocado prior to the 22nd may have moved quickly in order to avoid being the wrong side of the bid talk, so fuelling the mark-up on the day through closing activity," said Black.
"However, putting all that puff aside, in the absence of any clarification of any sorts from Ocado, it is hard to suggest that an orderly market in the stock was at play - some investors may also, of course, have taken the mark up as an opportunity to short the equity."
If there is no substance to the current bid chatter, Black said it will "do little to enhance the reputation of the stock, noting the impact of false bid dawns at that other UK consumer tech saga THG".
So, unless there is a material improvement in financial performance, Ocado's stock "can reasonably be expected to drift back", he contended