The tumult at SenseTime Group , a Chinese artificial intelligence (AI) software maker, showed no sign of letting up, as traders rushed to the exit to pre-empt a possible dumping of stock by corporate insiders. Shares of the Shanghai-based company, which has an 11 per cent share of the computer vision market , tumbled 19 per cent to HK$2.54 in Hong Kong on Monday, extending a 47 per cent plunge on the previous trading day, June 30, when a lock-up period covering 64.4 per cent of the company’s stock expired, according to Everbright Securities. While the number of shares that changed hands on Monday was a far cry from the 1.9 billion shares on the last trading day, the 942 million shares that were traded still represents a 12-fold increase from the 30-day average, according to Bloomberg data. The spike in trading volumes signals that selling pressure has not eased and still has legs. The sell-offs erased more than HK$120 billion (US$15.3 billion) from SenseTime’s market capitalisation in the space of three days. That has burned the company’s cornerstone investors, including SoftBank Group and Alibaba Group Holding. “The market is panicking about potential huge insider selling pressure after the expiry of the lock-up period, given the massive number of shares that have been unlocked,” said Wang Yun, an analyst at Everbright Securities in Shanghai. A total of 23.3 billion shares in SenseTime have become available for trading on the open market since Thursday, representing almost two thirds of the outstanding shares, according to Everbright. Pre-initial public offering investors hold 22.3 billion shares, while cornerstone investors have the remainder. “We are confident that our long-term growth and value, as defined through our strategy, will be recognised by our investors,” said Xu Li, co-founder and chief executive of SenseTime, in a written reply to questions from the Post late on Monday. The company said its technologies are trusted by customers and partners in many industries. Meanwhile, SenseTime said on June 30 that it has pledged voluntary lock-up undertakings until December 20,2022, as an expression of confidence in the long term value and prospects of the group. However, traders have their reasons to be worried, as insider selling typically catches them off guard and can cause serious losses. Unlike China’s onshore markets where major shareholders need to disclose their plans to alter the size of their stake in advance, Hong Kong’s market has no such regulatory requirements, enabling insiders to trim their stocks at elevated levels without alerting public investors. Another recent example came last month when shares in Koolearn Technology Holdings surged more than eight-fold in a week because of its foray into live-streaming e-commerce. Shareholder Tencent Holdings quickly took advantage of the upsurge, slashing its interest in the company to 1.58 per cent from 9.04 per cent in a sale valued at HK$720 million. Tencent’s move was revealed on the exchange’s website days later, sparking a 32 per cent plunge in Koolearn’s shares in a single day. SenseTime’s performance has diverged from other Chinese technology stocks trading in the city. The Hang Seng Tech Index has risen 40 per cent from a low in March, buoyed by optimism that Beijing will continue to ease its regulatory crackdown to stem a slowdown in economic growth. Everbright Securities predicts the headwinds facing SenseTime will gradually recede in the next month. The stock will probably become accessible to mainland investors by being added to the Stock Connect programme in August, according to the brokerage. SenseTime is now a member of the Hang Seng Tech Index, with a 0.4 per cent weighting. SenseTime started trading on the city’s exchange in December after raising HK$6.64 billion from the IPO. It is on a blacklist compiled by the US Commerce Department, officially known as the Entity List, for its alleged role in providing technology to monitor Muslim minority groups in China’s western Xinjiang region – something the company has repeatedly rejected.