Darktrace, based in the English university city of Cambridge, held its annual general meeting amid growing unease over the stock.
The company, which uses cutting-edge artificial intelligence (AI) technology to combat cyber attacks, arrived on the London stock market in April.
The initial public offering launched at 250 pence per share, valuing Darktrace at £1.7 billion ($2.3 billion, 2.0 billion euros).
Shares then vaulted higher in subsequent weeks and months to hit a peak of almost 1,000 pence in September.
Darktrace also joined London’s prestigious FTSE 100 index of top companies last month.
But shares then tanked after brokerage Peel Hunt questioned its valuation and technology.
In Wednesday afternoon trade, shares sank 3.25 percent to 482.60 pence, valuing Darktrace at £3.4 billion.
However, that was still around double the company’s launch price and initial value.
Darktrace nevertheless now faces potential relegation from the London Stock Exchange’s FTSE 100 club.
One shareholder at Wednesday’s AGM complained that a Darktrace director had sold a large amount of stock just as the share price was sliding, sending a “mixed message” to markets.
Another investor argued Darktrace had invested insufficient cash into research and development, in contrast with US rivals.
Yet the company countered Wednesday that it had delivered “strong” earnings in a critical year.
“Having delivered a strong set of full-year results and successfully completed our IPO, 2021 has been a pivotal point in Darktrace’s journey so far,” said Chairman Gordon Hurst.
Annual revenues had surged 41 percent $281 million, he added, with a similar uptick forecast next year.
Darktrace was founded eight years ago and has since rapidly expanded to serve more than 5,900 customers in around 100 countries, with a global workforce of 1,600.
CMC Markets analyst Michael Hewson argued it remained a “decent” business with a solid outlook.
“Its IPO price was 250 pence — and it’s still well above that,” Hewson told AFP.
“The falls from the 1,000 pence high look stark — but are symptomatic of a concerns about an elevated valuation after a recent broker note.
“Even with the recent declines and possible demotion from the FTSE 100, it’s still a decent business with good prospects.”