Eleven stocks fell sharply on Tuesday, amid a flurry of negative developments that dampened investor appetite.

The stocks defied an overall market optimism, with Wall Street’s major indices all finishing in the green. The Dow Jones inched up by 0.18 percent, the S&P 500 increased by 0.41 percent, while the tech-heavy Nasdaq grew by 0.30 percent.

In this article, we focus on the 11 stocks that performed the worst on Tuesday and explore the reasons behind their declines.

To come up with the list, we focused exclusively on mid-cap stocks with more than $2 billion in market capitalization and 5 million shares in trading volume.

11. Ocular Therapeutix Inc. (NASDAQ:OCUL)

Ocular Therapeutix saw its share prices drop by 6.7 percent on Tuesday to close at $11.69 apiece as investors sold off positions after announcing plans to raise $475 million from a share sale.

In a statement, Ocular Therapeutix Inc. (NASDAQ:OCUL) said it would offer more than 37.9 million common shares at a price of $12.53 apiece until Wednesday, October 1, subject to customary closing conditions.

Ocular Therapeutix Inc. (NASDAQ:OCUL) said proceeds from the offer will be used to fund its planned open-label extension study for Axpaxli in patients with wet age-related macular degeneration (wet AMD), as well as the phase 3 clinical trials of the drug candidate for the treatment of non-proliferative diabetic retinopathy (NPDR).

The balance will be allocated for investments in infrastructure, including capital expenditures to support manufacturing, for pre-commercialization activities associated with Axpaxli, if approved, and other general corporate purposes.

10. Unity Software Inc. (NYSE:U)

Unity Software snapped a two-day winning streak on Tuesday, shedding 6.75 percent to close at $40.04 apiece as investors took path from a rating downgrade from an investment firm.

In a market note, HSBC revised its recommendation for Unity Software Inc. (NYSE:U) to “hold” from “buy” previously amid valuation concerns, having already jumped by nearly 100 percent year-to-date as compared with the S&P 100’s 15-percent gain.

“Growing investor confidence in the prospects of a successful turnaround in Unity’s operations under its new management has seen Unity’s share price +91% YTD (vs the S&P100 index +15%), now trading at c9.8x NTM sales, a 66% premium to its 2-year average, and implying an EV/26e sales multiple for its Grow segment of c9-12x,” HSBC said.

Albeit Unity Software Inc. (NYSE:U) was valued lower than its counterpart, AppLovin Corp., HSBC said that the latter has demonstrated a more superior growth and execution.

Despite the downgrade, HSBC still gave Unity Software Inc. (NYSE:U) a higher price target of $40.80 versus the $37.50 previously.

9. Energy Fuels Inc. (NYSEAmerican:UUUU)

Energy Fuels extended its losing streak to a third straight day on Tuesday, shedding 7.08 percent to close at $15.35 apiece, as investor sentiment was dampened by plans to raise $550 million from the issuance of convertible senior notes that could result in shares dilution.

In a statement, Energy Fuels Inc. (NYSEAmerican:UUUU) said that the notes will have a tenor of six years and mature in 2031.

In line with the offer, the company gave its initial purchasers a 13-day option to purchase an additional $82.5 million worth of notes, beginning from the date of the offer.

Energy Fuels Inc. (NYSEAmerican:UUUU) said the notes will accrue interest payable semiannually in arrears and are convertible to cash or shares, or a combination of both, at the company’s election.

The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the convertible notes offering.

Energy Fuels Inc. (NYSEAmerican:UUUU) said it plans to use the proceeds to fund the expansion of the second phase of the White Mesa Mill, the Donald heavy mineral sands and rare earth project in Australia, and other general corporate purposes, among others.

8. Genius Sports Limited (NYSE:GENI)

Genius Sports fell by 7.82 percent on Tuesday to finish at $12.38 apiece as investors sold off positions following Kalshi’s launch of a parlay product, just ahead of two football matchups.

Genius Sports Limited (NYSE:GENI) fell alongside its sports-betting counterparts after Kalshi launched its own “build your combo” feature, which allows users to pair multiple contracts with a game.

Further dampening sentiment was that 90 percent of Kalshi’s betting volume comes from sports contracts.

The product was unveiled ahead of the dual football matchups on Monday night, between the Dolphins and the Jets, and the Bengals and the Broncos.

Commenting on the drop, Texas Capital Securities analyst David Bain said that investors should look at the decline as a buying opportunity for online gaming-related stocks.

Amid all the buzz, Bain said that Genius Sports Limited (NYSE:GENI) is the clear winner across the sector as it benefits from market expansion of any kind.

7. Snap Inc. (NYSE:SNAP)

Shares of Snap Inc. (NYSE:SNAP) declined by 8.21 percent on Tuesday to end at $7.71 apiece as investors soured on an investment firm’s conservative stance for the company, while digesting the impact of OpenAI’s new short-form video app on the company.

In a market note, Mizuho Securities gave Snap Inc. (NYSE:SNAP) a “neutral” rating with a price target of $9. The figure represented only a 7 percent upside potential from its $8.4 closing price prior to the report, and 16.7 percent from its latest closing price.

According to Mizuho, investors should exercise caution in their Snap Inc. (NYSE:SNAP) portfolios amid weak feedback from its advertising channels.

In other developments, Snap Inc. (NYSE:SNAP) also dropped after reports that OpenAI will launch an image and video generator app based on its Sora2 model.

The app is said to resemble infamous vertical video mobile app features such as TikTok, as well as Facebook, YouTube, and Instagram reels.

Meanwhile, Snap also offers its own short-form video format through its feature, Spotlight.

6. Flutter Entertainment plc (NYSE:FLUT)

Flutter Entertainment snapped two straight days of gains on Tuesday, losing 10.33 percent to close at $254 apiece as investor sentiment was dampened by Kalshi’s launch of a new product that would rival its sports-betting features.

Flutter Entertainment plc (NYSE:FLUT) fell alongside its sports-betting counterparts after Kalshi on Monday night launched its “build your own combo” parlay product, which allows users to pair multiple contracts with a game.

Further dampening sentiment was that 90 percent of Kalshi’s betting volume comes from sports contracts.

The product was unveiled ahead of the dual football matchups on Monday night, between the Dolphins and the Jets, and the Bengals and the Broncos.

Despite the news, Flutter Entertainment plc (NYSE:FLUT) maintained a “buy” recommendation and a $365 price target from investment firm Benchmark, amid its strong performance from its FanDuel unit during the third week of the NFL season.

The new price target represents a 43.7 percent upside potential from its latest closing price.

5. Etsy, Inc. (NASDAQ:ETSY)

Etsy snapped a two-day winning streak on Tuesday, shedding 10.69 percent to end at $66.39 apiece as investors resorted to profit-taking following its surge to a record high in the previous trading day.

In recent news, Etsy, Inc. (NASDAQ:ETSY) announced that it would transfer trading to the New York Stock Exchange (NYSE) beginning October 13 and cease on the Nasdaq on October 10.

Investors initially viewed the announcement positively, as getting listed on the NYSE—the largest stock exchange in the world—could help bolster its public exposure to a higher number of institutional and retail investors.

At present, the NYSE holds a roster of 2,300 listed companies with an overall market capitalization of $31 trillion, followed by the Nasdaq with $29 trillion in total market cap.

“We’re excited to join the [NYSE] and stand alongside some of the world’s most respected and innovative companies,” said Etsy, Inc. (NASDAQ:ETSY) CEO Josh Silverman.

“For 20 years, Etsy has connected tens of millions of thoughtful shoppers with creative entrepreneurs around the world, and we will continue to keep commerce human as we build even more personalized and differentiated shopping experiences. We’re looking forward to partnering with the NYSE to deliver on our commitments to transparency, excellence, and creating long-term shareholder value,” he added.

4. DraftKings Inc. (NASDAQ:DKNG)

DraftKings plummeted by 11.59 percent on Tuesday to end at $37.40 apiece after investors unloaded positions to mitigate risks of Kalshi’s launch of a new product that poses a threat to its business.

DraftKings Inc. (NASDAQ:DKNG) fell alongside its counterparts after Kalshi announced on Monday its new “build your own combo” parlay product that would allow users to pair multiple contracts with a game.

Adding to the sentiment was that 90 percent of Kalshi’s betting volume comes from sports contracts, and that the latter could operate in states and at ages that online sports betting applications are unable to cater to.

The product was unveiled ahead of the dual football matchups on Monday night, between the Dolphins and the Jets, and the Bengals and the Broncos.

The drop also showed that investors shunned news from DraftKings Inc. (NASDAQ:DKNG) on Monday that it entered into a multi-year advertising agreement with NBCUniversal to execute exclusive integrations and digital sponsorships across NBCUniversal’s top-tier sports properties, including premier national coverage.

Under the agreement, DraftKings Inc. (NASDAQ:DKNG) will be featured across NBCUniversal’s extensive portfolio of sports properties, spanning the NFL, PGA TOUR, Ryder Cup, Premier League, NCAA football and basketball, NBA, WNBA, and more.

The deal also includes NBCUniversal’s tentpole events, including Super Bowl LX, NBA All-Star Weekend, and the 2026 FIFA Men’s World Cup on Telemundo.

3. Klaviyo, Inc. (NYSE:KVYO)

Klaviyo extended its losing streak to a fourth consecutive day on Tuesday, shedding 12.07 percent to end at $27.69 apiece, as investors continued to digest an investment firm’s price target reduction for its stock.

On Thursday, Klaviyo, Inc. (NYSE:KVYO) earned a new price target of $50 from Piper Sandler, lower than the $55 previously, following its first analyst day since 2023, where the company outlined its vision to transform to an AI-assisted platform from a marketing tool for retail brands.

Piper Sandler believed that despite its over 176,000 customers, Klaviyo, Inc. (NYSE:KVYO) was only able to capture 1 percent of its potential market.

Additionally, the company’s vision was said to be promising, but its fiscal 2028 operating margin of approximately 16 percent fell below analyst expectations, primarily due to pressure from its SMS business.

Despite the lower price target, Piper Sandler remained “overweight” for shares of Klaviyo, Inc. (NYSE:KVYO).

2. DocuSign, Inc. (NASDAQ:DOCU)

DocuSign, Inc. (NASDAQ:DOCU) dropped its share prices by 12.24 percent on Tuesday to end at $72.09 apiece as investors sold off positions after OpenAI launched its own tool called DocuGPT.

The new tool is said to be a powerful AI tool that aims to streamline contract management processes, and an AI agent specifically crafted to manage extensive volumes of contract data.

According to OpenAI, DocuGPT is able to convert contracts into structured and searchable data. Finance teams use it for faster and more consistent review at scale.

The launch posed a significant threat to DocuSign, Inc. (NASDAQ:DOCU), which, for a long time, has dominated the electronic agreements and management industry.

The launch of DocuGPT could put significant pressure on the company’s profit margins, given the former’s quicker support and response, with automatic review and triage of contracts, and making agreement data searchable, among other features.

1. Firefly Aerospace Inc. (NASDAQ:FLY)

Firefly saw its share prices nosedive by 20.67 percent on Tuesday to end at $29.32 apiece as investors unloaded positions after its Alpha rocket exploded during testing.

In an update on Monday, Firefly Aerospace Inc. (NASDAQ:FLY) confirmed the explosion of the first stage of its Alpha Flight 7 rocket.

“The company is assessing the impact [o]n its stage test stand…We learn from each test to improve our designs and build a more reliable system,” it said, adding that proper safety protocols were followed and all personnel were marked safe during the test.

The explosion came two weeks before the rocket’s official flight mission, creating another setback in Firefly Aerospace Inc.’s (NASDAQ:FLY) launch program.

Additionally, Firefly Aerospace Inc. (NASDAQ:FLY) recently closed an investigation into a separate Alpha rocket mission earlier this year that placed a Lockheed Martin satellite into a shallow orbit, suggesting mission failure.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email below.