It certainly has been a disappointing few days for the Big Un Ltd (ASX: BIG) share price.
The video technology company's shares are down 11% on Tuesday, bringing their five-day decline to over 25%.
What happened?
At this stage it is unclear why the Big Un share price has tumbled so drastically, but I think there are three potential catalysts for this.
The first is that there is a chance that the market was pricing in even stronger growth in the United States in FY 2018.
As of yesterday's update, management has provided rough guidance of annual revenue of US$15.3 million from its U.S. operations this financial year. This is based on its assumption of 6,800 signed agreements, with a conversion rate of 50%, and an ARPU of US$4,500.
The second potential catalyst for this decline is profit-taking. Despite Big Un's shares being down over 25% in the last week, they are still up a remarkable 1,382% since the start of the year.
Unfortunately, profit taking often turns into panic selling, which in turn spurs on more selling.
The third and final potential reason for this sell-off could be a rotation out of small-cap growth shares by investors.
A number of popular small-cap growth shares including Catapult Group International Ltd (ASX: CAT), Change Financial Ltd (ASX: CCA), Bubs Australia Ltd (ASX: BUB), and Wattle Health Australia Ltd (ASX: WHA) have come under pressure in recent weeks following strong runs higher.
Should you invest?
I would suggest investors wait for the share prices of all these shares to stabilise before snapping up shares. I have no doubt that some of the shares listed above will be left trading at very attractive prices once the selling stops.
