What happened

Shares of distance-education company K12 (LRN -0.74%) were plummeting on Thursday, after Florida's Miami-Dade School Board unanimously voted to stop using the platform. According to the Miami Herald, the vote came around 2 a.m. EDT on Thursday morning after a 13-hour meeting full of negative comments from parents and teachers alike.

K12 stock is still up around 50% year to date as investors believe it's aptly positioned to profit from an altered educational system. However, the stock is also down 41% from highs reached in August. Today, the stock was down 10% as of 3:15 p.m. EDT.

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So what

After the Miami-Dade School Board decision, K12 president Shaun McAlmont appeared on CNBC to talk about the company's growth in 2020. But he was eventually asked about Miami. McAlmont responded by saying the company wasn't given enough time to develop the solution the school board was looking for. But he attempted to assure shareholders by saying it "won't have an impact on our financial position."

While acknowledging the loss of Miami's business, McAlmont pointed out that both schools collectively and students individually choose to use K12's services. McAlmont said the company has around 170,000 students currently enrolled, which is an increase of around 40% year over year.

A surprised man places his hand on his head while looking at his computer screen.

Image source: Getty Images.

Now what

In the case of K12 stock, expectations may have been too high. In July, prominent research firm Citron Research called K12 the Teladoc of online education. At the time, a price target of $100 per share was set, and the stock surged as investors scrambled to get a piece of the action.

There's an important takeaway from McAlmont's interview. Just because the elementary-education space is ripe for a technological disruption, that doesn't mean companies are prepared to capture the opportunity. And it certainly doesn't mean it can be completely captured overnight.

That's why it's always best to patiently measure a company's progress over the course of years, refusing to get swept away by flashy headlines. If K12 is truly a company worth owning for the long haul, it will prove it in the coming quarters. It's best to buy stock in a company for its business performance, not potential alone.