What happened

The stock market had a day to forget on Tuesday, but Wix.com (WIX 2.17%) shareholders really had a day to forget. Shares of the DIY website services company fell by nearly 5% in price as it was revealed that a prominent institutional investor had trimmed its stake. 

So what

After market hours on Monday, Starboard Value updated its Wix.com holding in a regulatory document. According to the filing, the investor now holds just over 3.9 billion shares of Wix.com, giving it a 6.6% stake. That's notably down from the 9% it disclosed in a similar regulatory document filed in mid-September. 

Starboard Value frequently enters a company as an activist investor, aiming to change the strategy, culture, and/or management team of an investment once it builds up an anchor holding. Elsewhere in the tech sector, the company recently disclosed stakes in Salesforce and Splunk.

Starboard's involvement with Wix.com seems to have been relatively harmonious. When the company acquired its stake, it said it supported the DIY website services provider's ambitions to turn profitable. It added that it was in discussions with management about how to improve Wix.com's business and was not seeking seats on its board (as it has campaigned for at other investments).

Now what

Hardly for the first time this year, tech stocks are currently sliding out of favor. So the Starboard Value trimming news didn't come at an opportune time for Wix.com and its investors. The reduction of the stake isn't particularly drastic, though, and at least on paper, the investor is still involved in the company. No shareholder should panic about this latest development; Tuesday's reaction feels overblown.