Why eXp World Holdings Stock Cratered 17% at the Open on July 24

Shares of eXp World Holdings (NASDAQ: EXPI) fell as much as 17% in early trading on July 24. Although the stock had gained back some ground by 11 a.m. EDT, it was still off by nearly 13%. There wasn't any material news out of the company, but investors appear to have at least temporarily soured on the investment theme that's pushed eXp World Holdings' stock up by well over 100% in just three months.

This is a unique company in a very important way. On the surface it's a real estate company, providing services to real estate brokers. However, it does this via the cloud, providing a "virtual office." So it's also something of a technology company. To be fair, it has been growing rather quickly, with trailing 12-month revenue more than doubling in the first quarter, year over year. But it is still bleeding red ink, posting a trailing 12-month loss in the first quarter. Yes, the decline wasn't as bad as the same period in the previous year, but this is not a highly profitable company. Investors bidding the stock up are betting that it will become profitable in the future.

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Source Fool.com