Step One Clothing Ltd (ASX: STP) shares are crashing down to earth on Thursday.

In morning trade, the ASX share is down over 12% to $1.64.

Why is this ASX share crashing?

Investors have been selling this online underwear retailer's shares this morning after its founder and CEO, Greg Taylor, offloaded a large chunk of shares.

Insider selling often sparks panic among investors. After all, if the company insider felt that their shares were going to increase in value, they wouldn't sell them.

And with the Step One share price up over 200% since this time last year, investors may fear that this is a sign that this ASX share has peaked for the time being.

What was sold?

According to the release, Taylor has agreed to sell down 16,632,352 fully paid ordinary shares in the company, which represents approximately 8.97% of Step One's issued capital.

In addition, the retailer's director and chief legal officer, Michael Reddie, has agreed to sell down 2,014,206 fully paid ordinary shares in the company. This represents approximately 1.09% of Step One's issued capital.

These sales were undertaken at a 9.3% discount of $1.70 per share through a fully underwritten block trade.

This means the directors received a consideration of approximately $28.3 million and $3.4 million, respectively.

Why the selling?

Step One's founder and CEO revealed that the shares were sold to satisfy investor demand. Taylor also highlights that he remains the company's largest shareholder by some distance and still has plenty of skin in the game. He said:

I am excited about Step One's growth opportunities and continue to be as committed and driven to achieve our global growth ambitions. As we continue to execute on our strategy, it's encouraging to see interest from new, long-term investors wanting to be part of our growth journey. The sale represents a small portion of my shareholding, and I will remain Step One's largest shareholder with approximately 57.91%. The decision to sell was driven by strong investor demand and enhances liquidity and free float broadening the share register.

The ASX share notes that Mr Taylor and Mr Reddie have agreed to escrow their remaining shares until the release of the company's full year results in August 2025.

In addition, Taylor has reiterated his commitment to Step One as its founder and CEO, and his intent to remain a substantial, long-term shareholder.