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I don't think they're saying they did it for price manipulation, I think they're saying they ditched the shares because they thought the price would tank
Isn't it true that a lot of stock dips down after an initial IPO high? Even if the company is solid? I'm not sure this isn't typical or even expected behavior for even well run companies.
Generally C-level employees and officers are prohibited from selling for several months after an IPO. The restriction is common for a couple of reasons. First is it protects initial investors from added risk of the sale by the people running the company being perceived as a red flag causing a significant drop in the stock price. Second it protects the C-level employees and officers from the appearance of insider trading.
The SEC has rules in place on how high level management can trade in the stocks for their own companies to make it difficult for them to trade on non-public information. A large stock sale shortly after a significant event like an IPO can trigger an investigation. To sale the shares legally before a 90 day cool down had passed they would have needed to file a notice of the sale with the SEC and provided justification for not observing the cool down period.
This is usually true, but since this isn't being reported as illegal trading, I'm not sure what the circumstances actually are.
But it is for sure not a good look to have c-suite shares being dumped. It gives the appearance of a lack of confidence in the share price and long-term profitability