What happened

Shares of Phunware (NASDAQ:PHUN) sank 53.7% in March, according to data from S&P Global Market Intelligence. The stock had its initial public offering in January and has gone on to have one of the most volatile runs of any company on the market this year.

PHUN Chart

PHUN data by YCharts

Phunware stock rocketed out of the gate, gaining nearly 2,000% in January and rising from a $300 million market cap to a $9 billion valuation thanks to investor excitement about its cloud and blockchain services and its cryptocurrency -- PhunCoin. However, it seems that investors quickly reassessed that exuberant position -- as shares lost roughly 90% of their value in February and went on to post more big losses in March.

A cloud icon in front of a city landscape.

Image source: Getty Images.

So what

The company published full-year results on March 20, but it's not clear whether the earnings release significantly impacted the market's read on Phunware stock. Sales for the year rose roughly 16% to reach $30.9 million, and the company's adjusted loss per share for the period narrowed to $0.38 -- improving from a per-share loss of $1.06 in 2017.

Phunware's volatility appears to have stemmed from an isolated resurgence of cryptocurrency hype rocketing shares to massive gains despite no real evidence that the business' outlook had improved. A more somber reality seems to have settled in among investors, and the stock now trades down roughly 45% from its $10 IPO price. 

Now what

Phunware stock has continued to plummet in April, with shares trading down roughly 60% in the month so far as the glow around the company's cryptocurrency and blockchain ambitions has continued to fade. 

PHUN Chart

PHUN data by YCharts

Phunware's 2018 performance showed solid sales growth and dramatically narrowing losses, but there's little visibility as to how demand for the company's cloud and blockchain services will develop over the long term. Phunware is valued at roughly 6 times last year's revenue, a multiple that that doesn't seem out of place for its industry, but investors without high risk tolerance should probably continue to look elsewhere.

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.