Selling when you learn reddit is abandoning it is expected. Not many people would want to keep holding after.
People can't overpay if they can't buy it at all. By putting it on the market the seller aids and abets their buying at higher than the true market price. This is a social bad.
Heck look at the scandal (which imo should have been bigger) around congresspeople trading around mask/healthcare/vaccine stocks early in 2020 based on their reports while publicly downplaying risks.
That's because the US government at least hates competition. If people get too good at discovering the value of something those methods become illegal because it isn't fair to those who don't want to actually go after information and just want to read news headlines and earning reports.
Though maybe you're right. If it really loved competition it would be better at preventing monopolies, would bar patents, and do sundry other things that would guarantee an unregulated (by anyone, not just government) free-for-all.