What happened

Shares of DoorDash (DASH 2.30%) spiked higher on Tuesday, possibly because it's gaining attention from institutional investors. As of 2 p.m. EST, the stock was up 8%.

So what

Tiger Global Management is an institutional investment manager, and the Securities and Exchange Commission (SEC) requires these entities to release their holdings every quarter. Among the holdings released today, Tiger Global revealed that it had purchased 1,596,000 shares of DoorDash. Keep in mind that it didn't own any last quarter, but that's because DoorDash only went public in December.

A businessman draws a line graph with an exponential growth curve.

Image source: Getty Images.

Tiger Global Management's stake in DoorDash is relatively small. Because DoorDash has over 286 million shares outstanding, Tiger Global owns less than 1% of the company. Furthermore, with a portfolio value over $39 billion (per the filing), its DoorDash stake (worth $227.8 million as of the filing cutoff date) is a small position in its portfolio. Still, it's a vote of confidence from an institutional investor, and that's enough for investors to celebrate DoorDash today.

Now what

Investors who are encouraged by Tiger Global Management's purchase of DoorDash stock should keep in mind that there's a slight lag between the report and now: We don't know if Tiger Global has bought any DoorDash stock lately. And considering the stock is up over 50% this year, it's possible it hasn't been a buyer during the first quarter of 2021.

In the end, though, it shouldn't really matter to you what Tiger Global Management -- or any other institutional investor -- does. Following an investor or a fund into a stock without due diligence is a bad idea. Your hard-earned dollars deserve to be invested in companies in which you've developed personal conviction from taking the time to research their stocks.