Why Did Remark Holdings, Inc. Stock Fall Tuesday?

MarketsMotley Fool

What happened

Shares of artificial-intelligence solutions and digital-media company Remark Holdings (NASDAQ: MARK) fell as much as 20.6% on Tuesday. But shares finished the trading day down 17.6%.

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The stock's decline came amid a sell-off in broader market indices, with major indices including the S&P 500 and the Nasdaq Composite falling 0.9% and 0.8%, respectively. Of course, Remark's outsize decline on Thursday probably reflects other factors.

Since there doesn't seem to be notable news for Remark this week, the move may be driven mostly by technical factors.

So what

From time to time, stocks make big moves without any fundamental news. Small-cap stocks like Remark, with a market capitalization of under $240 million at the time of this writing, are particularly susceptible to large daily swings.

After the stock rose sharply in December and in early January, some investors may be opting to take their profits amid an overall pullback in the stock market over the past two days.

Now what

Remark expects significant top-line growth in 2018. Management said in its third-quarter earnings release in November that it expects to generate revenue above $100 million, with most of its growth driven by more than $30 million from KanKan's AI Platform. On average, analysts believe Remark's 2017 revenue was just over $71 million.

The bottom line is that investors should expect lots of volatility from a small-cap company that may also be considered a growth stock.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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