Petco Health and Wellness Company, Inc. (WOOF) experienced a sharp 5.69% decline in after-hours trading on Wednesday, following a significant intraday surge. The stock's volatility comes in the wake of a substantial insider purchase by the company's CEO.

Earlier in the day, Petco's stock had soared 12.8% during regular trading hours after a regulatory filing revealed that the company's CEO had purchased 1.586 million shares of common stock. This large insider buy initially sparked investor confidence, driving the stock higher.

However, the after-hours plunge suggests that investors may be engaging in profit-taking or reassessing the stock's valuation following the dramatic intraday rise. The reversal could also indicate that some market participants view the CEO's purchase as insufficient to address broader concerns about the company's performance or industry challenges.

Analysts note that such volatility is not uncommon following significant insider transactions, especially in the current market environment where investors are particularly sensitive to corporate insider activity. The after-hours movement may also reflect a broader market reassessment of the pet care industry's prospects amid changing consumer spending patterns.