Reddit shares are plummeting after experiencing a rally stemming from the social media company’s IPO last week.

Shares closed Thursday at $49.30, falling below their closing price on Reddit’s first day of trading last week on the New York Stock Exchange.

Reddit shares began their downward spiral on Wednesday, when they sank about 11% to $57.75 at market close. That day, Hedgeye Risk Management described Reddit’s stock as “grossly overvalued” in a report cited by Bloomberg News, adding that the company was on the firm’s “short bench.”

Earlier this week, Reddit disclosed in a corporate filing that CEO Steve Hoffman sold 500,000 shares. Ben Silverman, VP of research at Verity, told CNBC the move was expected and represents just “a portion of his holdings.”

Reddit COO Jennifer Wong also disclosed that she sold 514,000 shares and now holds 1.4 million of the company’s shares.

“There’s always a bit of a disconnect, because the purpose of bringing the company public is twofold,” Silverman said. “It’s not just to generate liquidity for the company itself so that it can expand and grow. In these situations, it often allows insiders to cash out to generate liquidity, and that’s something executives have to consider here.”

“If the prospects are so bright, why are insiders selling?” Silverman added.

Reddit shares started off the week on a high note and soared 30% on Monday. The company’s shares then rose 8.8% on Tuesday to close at $65.11, even after New Street Research issued a neutral rating on the company.

The New Street Research analysts wrote in a note that they wouldn’t alter their $54 price target and that they expect “volatility into the first earnings report.”

Watch: Reddit shares slump after CEO Steve Huffman sells 500,000 shares.