Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of local advertising specialist ReachLocal (Nasdaq: RLOC) fell more than 10% late in the session on a day when all three major indexes were trending down 1% or more.

So what: As far as I can tell, there's no specific news driving down the stock today. Investors may simply be unnerved by the bearish sentiment surrounding ReachLocal. More than 9% of the company's tradable shares were sold short as of this writing.

Now what: Why the pessimism? My own analysis says that management just isn't that good at deploying capital in the quest for value. They also own too little of the company to create a serious incentive for improvement. So while I'm generally loathe to short volatile small caps like this one, I can understand why the bears have come out of hibernation on this stock.

Interested in more info on ReachLocal? Add it to your watchlist .

Fool contributorTim Beyers is a member of theMotley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim'sportfolio holdings andFoolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insightsdelivered directly to your RSS reader.

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