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Why Fiverr International's Shares Plunged 15.5% and Then Bounced Back

By Travis Hoium - Feb 23, 2021 at 4:10PM

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Growth stocks are taking it on the chin today.

What happened 

Shares of freelance services company Fiverr International (FVRR 6.93%) plunged as much as 15.5% in early trading today as tech stocks sold off hard. Shares are down just 0.4% at 3:30 p.m. EST so while shares dropped early the stock has recovered almost all of the early losses. 

So what

As tech stocks fell early in the day, high-growth stocks like Fiverr were hit harder than most because they've been such great performers. In the last 12 months, Fiverr shares are up 727% and that's even after today's drop. So, a pullback isn't the end of the world for long-term investors. 

Person holding downward facing arrow.

Image source: Getty Images.

The general worry is that rising interest rates will slow economic growth and ultimately the growth rate of companies like Fiverr. And this week that narrative has taken hold and impacted growth tech stocks like this dramatically. 

Now what

Drops like today's are part of the volatility of owning high-growth stocks. But they can also be buying opportunities for long-term investors. We don't know if there's more downside ahead, but the investment thesis for Fiverr and other growth stocks hasn't changed today and that's part of the reason shares recovered late in the day. Most of the time, doing nothing is the right move and that's what long-term investors in Fiverr should be doing on days like today. 

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Fiverr International Ltd. Stock Quote
Fiverr International Ltd.
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