SWIR Chart

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What: Shares of Internet of Things hardware specialist Sierra Wireless (NASDAQ:SWIR) fell 13% in May, according to S&P Capital IQ data. The company reported good first-quarter results but weak forward guidance in the first week of the month, igniting a quick 8% drop. The rest of the negative action started when two other players in the IoT market announced a blockbuster $37 billion merger.

So what: Fellow Fool Steve Symington argues that Sierra Wireless has a history of beating its own lowball guidance figures. As for the Internet of Things merger action, Avago Technologies (NASDAQ:AVGO) and Broadcom (UNKNOWN:BRCM.DL) sit on a different level of that market. I'm not at all sure that acquisitions in the rapidly consolidating semiconductor layer should spark disappointment over a lack of buyout bids in the more diverse and stable devices segment, where Sierra stands.

Now what: As both professional and private investors try to figure out what the Internet of Things really means to their portfolios, there's plenty of room for misunderstandings and overreactions. Sierra may have been on the upside of that phenomenon last year as share prices more than doubled in the second half of 2014. In 2015, this highly volatile stock is taking the brunt of investor nerves and unclear industry prospects. Sierra shares have fallen 36% year-to-date.

Don't cry for Sierra Wireless and its long-term investors, because the stock is still up 164% over the last two years and the best years may still be ahead. Just don't expect a smooth ride, nor a risk-free one. Stock up on antacids before hitting that "buy" button for Sierra Wireless.