What happened

Four days ago, Chinese electric car maker XPeng (XPEV 1.24%) roared onto the public markets. Debuting at an IPO price of $15 per American Depositary Share, XPeng ran ahead 41.5% on its first day of trading and then tacked on 7.4% more on its second day.

Today, however, XPeng is giving some of that back.

White arrow declining sharply atop a stock ticker tape display bathed in red.

Image source: Getty Images.

So what

Through 1:55 p.m. EDT Monday, XPeng shares have already retreated 10% from their closing price Friday and are down 18% from their intraday high hit Thursday. And yet, there appears to be no particularly bad news afoot today -- no analyst downgrades, no sudden reductions in price target, nothing more substantive than falling share prices.

So why are XPeng shares falling? True, the company is unprofitable, burning cash and selling for about 50 times revenues. True, most automakers (Ford, GM, Toyota) sell for a fraction of one times revenues, so XPeng looks pretty overvalued relative to the competition. But all of this was as true at the time of XPeng's IPO as it is today.

Now what

No, I think the plain truth of the matter is that XPeng stock is falling today not because of something the analysts have said about it nor because of something the company has done wrong, but because its IPO last week went so very right. And because, as a result of the IPO going so very right, early investors in XPeng were gifted a windfall of a whole lot of paper profits last week.

They're cashing those profits in today, taking chips off the table, and until I see evidence that XPeng has a path to profitability, I cannot say they're wrong to do so.