Electro Optic Systems Holdings Ltd (ASX: EOS) saw its shares plummet nearly 24% during Tuesday's intraday session, following news of significant insider selling by top executives.

The sharp decline came after the company announced that its CEO, Dr Andreas Schwer, and other members of the management team exercised options to acquire shares at a low price and plan to sell a large portion of them in the near term. The CEO's planned disposal of up to 2.5 million shares, valued at approximately $26.8 million based on prior closing prices, is intended to fund personal expenses including a family home construction and a divorce settlement.

Investors reacted negatively to the scale of the potential insider selling, as such actions are often viewed as a bearish indicator, suggesting insiders may lack confidence in near-term share price appreciation. Despite the disposals, the company expects executives to retain holdings above minimum required levels under its shareholding policy.