When startups win a round of funding, they typically win applause.

But when a 4.5-year-old publicly traded company — even one that completed its initial public offering (IPO) in arguably record time — it can look like the beginning of the end.

At least that’s what happened yesterday with Hortonworks, the provider of big data crunching Apache Open Source Hadoop. People were tweeting images of explosions and violent fires alongside the company's name, along with ominous headlines like “Hortonworks Shares are Tanking.”

Hortonworks' stock fell around 37 percent to close at $10.44 yesterday, an all-time low. As recently as Aug. 11, the company's shares closed at almost $28.

The company went public in December 2014.

Bad Communication

On Friday afternoon, Hortonworks filed a registration statement with the US Securities and Exchange Commission for a $100 million secondary stock offering. That's a sizable sum for a company with a total market capitalization of around $600 million.

But the secondary round wasn’t totally unexpected, according to Richard Kugele, a senior analyst at Needham & Company. "Clearly some type of capital raise was anticipated (and the company said as much previously), but there was also no sense of urgency on the part of management in any public commentary," he wrote in a research note.

Unlike many other young companies, Hortonworks has to do all of its business out in the open because of its public status.

In an interview with CMSWire last summer, Hortonworks President Herb Cunitz said he was "comfortable putting transparency into the market" by taking the company public so quickly.

His reasoning was that it would alleviate any concerns that prospective customers and partners might have about Hortonworks health if they saw how well it was doing.

Part of that strategy seems to have worked. Though Hortonworks won’t be releasing its fourth quarter earnings until Feb. 10, it has told the SEC that it expects revenues to range between $37 million and $38 million, above prior guidance of $32 million to $34 million.

However, it expects gross billings of $52 million to $52.3 million — on the low end of the previously announced $52 million to $54 million. This is all expected to generate an operating loss of $50.7 million to $52.1 million, down from a loss of $92.5 million in the same quarter a year ago.

Market Issues

While Hortonworks numbers aren't especially alarming, there are fears of an impending stock market crash and increasing concern that some tech companies are overvalued. There’s arguably investor fear in the air.

And more than a few are calling Hortonworks move a bellwether for the entire big data market. That's especially true for Hortonworks competitors and partners like Cloudera, MapR, Pivotal Software, Altiscale and the like.

The news wouldn’t have come as such a shock if Hortonworks had simply hinted about its plans in advance. Instead, as Kugele noted, it will be up to Hortonworks now to show why this offering, "announced in this way, at this time should not be interpreted as evidence of serious difficulty."

Still, Needham and Company, based on what Kugele described as its "overarching positive stance on the space and the company’s relative position within it," is maintaining its buy rating.