What happened

Shares of Israeli X-ray machine maker Nano-X Imaging (NASDAQ:NNOX), a recent IPO, were down early Wednesday.

Nano-X shares plunged nearly 15% this morning. Then, oscillating wildly, the stock first recovered all its losses and then lost some more. At 10:20 a.m. EST, Nano-X was underwater once again, down 3.9% from yesterday's close.

Red stock arrow breaking up and showering down in pieces over a city below

Image source: Getty Images.

So what

It's a funny way for the stock to be acting on the cusp of a huge event.

In just one day, Nano-X plans to demonstrate whether its Nanox.ARC prototype works as promised. At 11:30 a.m. EST on Thursday, the company will perform a live demo at the 2020 Radiology Society of North America Virtual Annual Meeting. Then, three hours later, Nano-X will hold a conference call to discuss the demonstration and perhaps shed more light on its current sales status, and its plans for the device.

Now what

Investors are excited at the prospect, as they should be. After two long months of enduring attacks from short-seller Citron Research, which has accused Nano-X of being nothing but "a stock promotion," and predicting the stock will fall to a value of zero, Nano-X will finally get a chance to put Citron's criticisms to bed.

So why are Nano-X shares acting so weirdly today? If I had to guess, I'd say this is a simple case of investors hedging their bets.

All through the tail end of November, Nano-X stock has gone nowhere but up, rising 67% as investors bet heavily on a successful demonstration tomorrow. But there's still a chance that things will not go as planned: that the demonstration will flop, or Nano-X's post-demo comments will underwhelm investors. So some traders, not wanting to put their profits of the past 10 days at risk, are using discretion and selling today, rather than potentially regretting not selling tomorrow.

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.