Why DigitalOcean Stock Crashed More Than 20% in December
Shares of DigitalOcean Holdings (NYSE: DOCN) crashed 20.3% in December, according to data provided by S&P Global Market Intelligence. It appears investors have soured on expensive stocks like this and are actively betting they'll go down to more reasonable valuations. Considering there wasn't any other news to report during the month to explain this outsize drop, it seems investor sentiment was the primary driver of DigitalOcean's stock price.
Investors can make money when a stock goes down by shorting. When it comes to DigitalOcean, a provider of cloud services for small and medium-size businesses, we see that investors are increasingly making this bet. According to Yahoo Finance, 5.25 million shares of DigitalOcean were sold short as of Nov. 15. But by Dec. 15, this had increased a whopping 83% to 9.62 million shares.
Image source: Getty Images.
Source Fool.com
