It's happened many times. It's called life in pinkie land.
You can usually tell if the sell-off is a head fake based upon what happens at what appears to be the low. Invariably with a manipulated move, when the low is obtained, and a big trade is executed, the bid will immediately jump above the big trade price.
Think about it - if someone dumps a million+ shares wouldn't most shareowners be concerned and ready to sell their positions? So why would a buyer, looking for cheap shares at that price, raise his bid above the transaction price of the big trade? Because what appears to be a big seller is really a buyer, and he has manipulated the price to the point where he will take all the sale side panic shares, willingly buy all the shares the nervous nellies will sell to him. In order to insure you have no competition for the bid you raise the bid, at a time when most shareholders are in a panic and considering selling. Your broker is going to likely get you the best price anyway, so you just come off the low and let all those who panic and want to sell flow right into your offer.
So this is the way pinkies work. A market maker surveys all the bids, and notes a limited number of shares being sought on the bid side. He then gives the sell order and blows through all those bid orders and plummets the stock because there is no support. When support is broken the big trade is executed and is likely to a bid side account that is controlled by the same entity/individual that is working the sell side trades.
In other words, the intent is to buy. In order to buy cheap, you become a seller. You blow through support and then sell a million shares to yourself, using a different account and maybe a different market maker. And before the market can steady itself and see that this is a buying opportunity, you quietly sit on the bid and let the shares start coming to you. The sweet part of the whole arrangement is that you really only sold a million shares to yourself. What appears to be a huge sell-off is really only a couple hundred thousand shares changing hands.
My guess is that this was an orchestrated sell-off, done by somebody looking to buy, and he did just that. BTW so did I.
