Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Splunk Dropped 14% in September

By Chris Neiger – Updated Oct 8, 2020 at 2:50PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors fled tech stocks at the beginning of the month.

What happened

Shares of Splunk (SPLK 2.36%) fell 14.2% last month, according to data provided by S&P Global Market Intelligence, as some investors sold off tech stocks following months of gains in the sector.

So what 

Splunk's stock was up by as much as 50% this year until the very beginning of September, when investors quickly turned on tech stocks and began selling shares. The rapid sell-off of technology stocks pushed Splunk's share price down in the first few days of September and they stayed down for the rest of the month. 

A white arrow pointing down on a red background.

Image source: Getty Images.

It's unusual for a company's share price to drop so dramatically in a month without any company-specific news causing investors to sell their shares, but in this case, investors across most of the tech sector were dumping shares to cash in on the massive gains techs stocks have made in the months leading up to September. 

Some companies saw their share prices drop dramatically in early September and then bounce back, but investors didn't rush back to Splunk's shares and the company's stock ended the month down 14%.

Now what 

The stock market has been anything but predictable lately, and Splunk's share price plunge last month is proof of that. Investors can likely expect more share price swings from the company's stock, and in the market in general, even if there isn't any company-specific news driving the changes. Investors have been reacting to news about the presidential election, economic stimulus negotiations, the U.S. recession, and the pandemic, which have been more than enough to cause increased volatility in the market. 

Fortunately for Splunk investors, the company's stock has gained 10.8% since the beginning of October, pushing the stock up 39% since the beginning of this year.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Splunk. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Splunk Stock Quote
$77.68 (2.36%) $1.79

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.