What happened
Shares of freelancing and work-payments platform Upwork (UPWK -0.18%) were trading down by 13.7% late Wednesday, unwinding a solid gain made by the stock's bullish open. The swing into the red was set up by a strong rally from May's lows, and ultimately put into motion by this week's failed attempt to break into record-high territory.
So what
Don't look for a specific news-based reason Upwork so abruptly reversed course. You won't find one. The 72% run-up from May's low to Tuesday's close was largely set in motion by the company's first-quarter revenue that topped expectations, but was then fueled by a sweeping cultural shift away from traditional employment and toward gig-type jobs. Upwork's launch of Work Marketplace and a major rebranding of its service fanned the bullish flames.
Image source: Getty Images.
Investors may now be realizing they've bought into the idea a bit too aggressively.
Now what
It's not the sort of dynamic the average buy-and-hold investor ordinarily pays attention to. It would be short-sighted, however, to ignore that fact that yesterday's test of February's record highs started the stock's retreat. Wednesday's follow-through on Tuesday's intraday pullback underscores just how dramatically the market is now changing its mind.
When the reversal is this rapid and this big, it's a hint there's something more going on that just a little unfortunate volatility. Would-be buyers will want to steer clear here until the dust has settled, and current owners would be wise to start shopping around for exit points if they're not truly on board for the long haul.
