Your still missing the point. Regardless of why they sold, the insiders have a pile of money in their hands (assuming a cost basis of zero, which may not be correct), why not invest somewhere else? The risk of investing in your employer is very high as you get hit twice if the company collapses. They had a choice and they chose to reinvest back in Parallel.
Another example is Altus Group, T.AIF. Significant buying in 2011 around the $4.00 mark. I remember listening to a quarterly conference call at the time and I'm not sure if it was the CEO or CFO who said that the insiders owned 30% of the company. The company had a lot of debt, just completed a major takeover of another company, had a high dividend and a risk of cutting the dividend. I bought and bought heavily because I know that I can lose my investment, but the insiders are going to lose a lot more. The stock continued to go down until bottoming just below $3. They fired the CEO, never cut the dividend, sold off assets to cut debt and the stock recovered to $9.
The insiders already owned 30% and yet they bought more. Why? Because they knew that the company was solid and the best investment that they could make was in something that they controlled and knew was worth more than it was currently trading at.
General Donlee, t.GDI is another example. The debt level was higher than the company was worth, they are in a cyclical industry, the dividend was cut and it looked like curtains for them. Yet there was very high insider buying and at the current prices, a high yield. The stock recovered and the future looks rosy until the next downturn.
There are a few others, not many as insider buying of this magnitude is very rare. In every case the stock recovered and the dividend remained. In many cases the conversion from trust to company coupled with the downturn and in some cases, a dividend cut drove the stocks down. Personally, I don't care why the stock is cheap, all I care is that the people who are taking care of my money have a very personal involvement and share the risk and there is nice yield to make the wait worthwhile.
Words are cheap, show me the money. If the CEO is willing to invest a quarter of a million of his own money, I have no problem investing with him. I'll read the press releases and look at the financial reports, but the bottom line is that unless they have skin in the game, I ain't playing.
A perfect counterexample is RIM. The insiders sold half a billion dollars worth of stock at the peak. Since then, not a single insider has bought anything. The stock has tanked and none of the CEO's has dared to buy even a single share. Obviously, they have the cash and I'm certain they're not keeping the cash in the bank, but have invested elsewhere. Why? Because they have no faith in either themselves, their ability to turn the company around or because the risk is too high compared to rewards they can get elsewhere.
In closing, another quote from Peter Lynch: "All else being equal, favour companies in which management has a significant personal investment over companies run by people that benefit only from their salaries."