Why did ASX 300 healthcare stock Polynovo tumble 12% today?

Overall, it’s been a fairly positive day for ASX shares and the S&P/ASX 300 Index (ASX: XKO) this Wednesday. At market close, the ASX 300 gained a healthy 0.36%, putting the index at just over 7,740 points. But let’s talk about the massive losses of one ASX 300 healthcare stock – Polynovo Ltd (ASX: PNV)

Polynovo shares evidently did not get an invite to the ASX 300’s party this Wednesday. In fact, the healthcare stock plunged by a nasty 12.08% to close at $2.33 a share. That was after the Polynovo share price closed at $2.65 yesterday and opened at $2.68 this morning.

So what went on with Polynovo shares today that elicited this rather horrible share price drop?

Why did ASX 300 healthcare stock Poynovo tank today?

Well, to be exact about it, it’s a darn-tootin’ mystery.

There was no news or announcements out of Polynovo today. Nor has there been since 17 January.

So we can rule that out.

What we do know, however, is that ASX healthcare stocks were some of the worst-performing shares on the ASX boards today. Indeed, the ASX 200 healthcare sector was the worst-performing sector on the entire market. Other ASX healthcare stocks took a hammering today too, as you might expect.

Ramsay Health Care Ltd (ASX: RHC) shares finished 0.27% lower. Nanosonics Ltd (ASX: NAN) shares lost 1.5%. The Sonic Healthcare Limited (ASX: SHL) share price shed close to 3%, while Healius Limited (ASX: HLS) tanked more than 5%.

So it looks as though Polynovo was just caught up in the wave of pessimism that engulfed most ASX healthcare stocks this Wednesday.

There is another factor to consider as well though. In 2023 so far, the Polynovo share price has risen by a whopping 15.8%. And that’s after today’s fall.

Over the past 12 months, this company has gained a rather incredible 89%:

When a company has had this much success, especially over a short period of time, investors can tend to get itchy fingers when it comes to taking profits off the table.

This could well be a factor in why Polynovo shares tanked so dramatically today. And selling does often beget more selling. Yesterday saw the Polynovo share price put on an impressive 3.52%. So maybe this was the trigger for investors to start taking some profits.

We can’t really know what was behind the Polynovo share price’s poor performance on the ASX 300 today. But this scenario is certainly a strong possibility.

The post Why did ASX 300 healthcare stock Polynovo tumble 12% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Ramsay Health Care. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nanosonics and PolyNovo. The Motley Fool Australia has positions in and has recommended Nanosonics. The Motley Fool Australia has recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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