In April 2000 Alan Rooney sells 150,000 shares in Country Bumpkin at £2.90 each.
Directors of listed companies are not allowed to buy or sell shares in their own company in the "closed period" - normally two months before the company announces its financial results - but this is not the closed period for CB.
Nor are there any lockout covenants on Alan preventing him from selling, as you typically get with newly-floated AIM companies. So his sales are perfectly legitimate.
In accordance with Stock Exchange rules, Country Bumpkin notifies the LSE of Alan's share sales. Financial journalists pick up the news and report it in the Sunday press. They draw negative conclusions, commenting that if the CEO of Country Bumpkin thinks it's time to sell, then other investors should follow his lead.
The market is particularly skittish about directors dealings involving high multiple "growth" companies. It reacts badly to Alan's sales, driving the share price down to £2.20, a fall of almost 25%. Investors who have lost money vent their fury on internet bulletin boards, putting further pressure on the share price.
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