Shares of Webtoon Entertainment Inc. (WBTN) plummeted 27.32% during intraday trading, as investors reacted to the company's disappointing third-quarter results and weak fourth-quarter outlook. The sharp decline erased a significant portion of the digital comics firm's year-to-date gains, reflecting growing concerns about its near-term performance.

Webtoon reported Q3 revenue of $378.04 million, falling short of analysts' expectations of $385.1 million. The company also posted a net loss of $11.05 million, or $0.09 per share, compared to a profit of $19.986 million in the same quarter last year. Adding to investor worries, Webtoon forecasted a Q4 revenue between $330 million and $340 million, significantly below analysts' estimates of $353.8 million.

The negative sentiment was further amplified by several brokerage firms cutting their price targets for Webtoon. JP Morgan reduced its target price to $13 from $22, citing "volatility in results and external challenges such as advertiser pullback in Korea and regulatory actions." Similarly, Deutsche Bank lowered its price target to $19 from $25. Analysts noted that while management remains committed to investing in maintaining webcomic leadership, Webtoon has become a "show-me story that requires solid execution" in the face of current challenges.