Massive selloff unlikely, here is why

One possible problem with that scenario.  Lets say the massive quantity of RS also provides management a mechanism to maintain controlling interest or 51%. Now the company gets a license which drives volume and makes pps increase so a massive selloff is instituted after the previously RS are dumped on the market . (Your example) Who is to say that these shares can not be bought up by a competitor wanting a company with licensing/multipleJV's/ facilities, etc.,  Seems kind of counter productive although not outside the realm of what money does to people. Even if this occurred the likelihood is that this market will not go away.  I simply hold my shares and buy on the dip and ride it out.