What happened

Shares of Netgear (NASDAQ:NTGR) fell 11.3%% in September, according to data from S&P Global Market Intelligence, in lockstep with the post-earnings decline of recent spinoff Arlo Technologies (NYSE:ARLO).

For perspective, Arlo went public after separating from Netgear in early August. But its former parent company still owns an 84.2% stake in the home security camera specialist. 

Ethernet cables plugged into rack-mounted routers

IMAGE SOURCE: GETTY IMAGES.

So what

For perspective, when Arlo climbed nearly 50% from its $16-per-share IPO to just under $24 per share in late August, Netgear stock largely followed suit, given its substantial ownership stake in the company. But then Arlo tumbled back to just over $14 by the end of last month, after its first-ever report as a publicly traded company -- a likely combination of post-IPO volatility and concerns over its ability to sustain growth from its lucrative services segment -- and Netgear unsurprisingly fell along with it.

Now what

Keep in mind that Netgear won't maintain its large stake in Arlo forever. Following a mandatory 145-day lock-up period -- and just as it promised when the separation was initially announced in February -- Netgear intends to distribute its shares of Arlo to Netgear stockholders as a tax-free distribution.

Until that happens, however, it's safe to expect Netgear stock will continue to be tied to the performance of Arlo.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.