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 Tremor Video (NYSE:TRMR) plunged a harrowing 49% Friday after the online video advertising specialist reported disappointing third-quarter results.

So what: Quarterly revenue rose 17% year over year to $35.3 million, which translated to a net loss of $0.05 per share. Analysts were looking for a much smaller net loss of just $0.02 per share on sales of $36.26 million.

Worse yet, Tremor Video also issued weak fourth-quarter revenue guidance in the range of $29.5 million and $30.5 million, also significantly below analysts' projections for Q4 sales of $38.56 million.

Now what: Perhaps unsurprisingly, Tremor Video's poor performance and forward outlook sparked no less than three downgrades on the day, driving shares as much as 54% lower at one point. Call me crazy, but that does seem a bit of an overreaction for a company whose cash now represents more than 40% of its entire market capitalization. 

To be sure, Tremor will need to prove it can eventually achieve sustained profitability over the long term. While I wouldn't personally buy shares until that happens, its current results are hardly indicative of a failing company as it stands today. Don't be surprised, then, if the stock sees a near-term bounce once the market realizes its punishment doesn't fit the crime.