What happened

Shares of Universal Display (OLED -3.21%) had another bad day on Wednesday. The technologist behind the organic light-emitting diodes (OLEDs) found in many mobile devices and high-end TV screens saw its share price close 12.8% lower on no particular news of its own.

So what

Universal Display's stock has largely followed the broader market down over the last month, matching every drop and bounce of the S&P 500 with eerie precision as the coronavirus pandemic evolved. The stock did suffer a bit more than the broader market today as the S&P 500 ended Wednesday's trading session 5.1% lower.

A couple of developments in the OLED industry may have weighed on this stock today. Japanese imaging technologist Canon (CAJ -1.33%) announced that the company might produce and sell some OLED materials of its own. Canon is a leading maker of material deposition tools used in the manufacturing process for OLED screens, but has not entered the materials segment of this industry yet. Universal Display collected $243 million of material resales in 2019, up from $153 million the year before. If Canon aims to sell its OLED materials directly to screen builders, Universal Display could lose a significant chunk of annual revenue.

Furthermore, major customer Apple (AAPL 0.16%) presented a new iPad Pro tablet today. This device features the LCD-based Liquid Retina display, leaving Universal Display's OLED technologies out of the equation.

A woman holds a flexible OLED display, showing a colorful image while she bends the screen.

A flexible OLED screen. Image source: Getty Images.

Now what

This is not the first time Apple has bypassed OLED screens in a new device, and it won't be the last. Universal Display serves a large and diversified range of end-market device builders, so the updated iPad Pro is more of a missed opportunity than a destructive failure. As for Canon's potential entry into the materials market, the company may simply become a supplier of original product to Universal Display, replacing some part of the materials that chemicals giant PPG Industries has been producing on Universal Display's behalf for years.

Either way, it's no big deal. This stumble should soon disappear into the jagged ups and downs of the general market in this coronavirus era. Investors overreact to insubstantial news all the time, and exciting growth stocks like Universal Display only amplify these goofy swings.