Last month, when Harris & Harris (NASDAQ:TINY) was trading around $14.60 a share, I reminded readers that the payoff from an investment in this venture capital firm -- which specializes in nanotechnology -- would require a dose of patience, because the market for high-tech IPOs could remain tepid for the foreseeable future. Partly as a result of this reality, the stock has drifted lower.

Yesterday, though, Harris & Harris' stock plunged 12%, and it is now trading at just less than $12 a share. This latest drop, however, has nothing to do with the broader market and appears to be a gross overreaction to news earlier in the week that the company's president, Doug Jamison, was exercising some additional stock options.

Part of the problem was that the news of Jamison exercising 10,000 options came on the heels of reports that both he and Harris & Harris chairman Charlie Harris had exercised 25,000 and 28,000 options, respectively, the previous week.

In many situations, dumping such blocks of shares would be a legitimate cause for concern. This, however, is not one of those times.

To begin, the sales were quite modest; in total, just more than 60,000 options were exercised. The shares were optioned at $10.11 and then exercised at around $12.35 a share, which means that Mr. Jamison netted something in the neighborhood of $70,000 and Mr. Harris about $60,000. This is a nice chunk of change, but it is hardly the stuff that signals a lack of confidence in the company's future. If anything, the sales smell more to me like an end-of-year tax move.

Second, I would remind investors that the sales were conducted under a pre-arranged trading plan and, if anything, they should be considered good news for investors because they are non-dilutive in nature and actually net the company a modest amount of new money that can be used toward other nanotechnology-related investments.

Harris and Harris has a great deal going for it, and I continue to be bullish about its investments in Nantero, Evolved Nanomaterials, Cambrios, and Molecular Imprints. If you believe, as I do, that nanotechnology will play a transformative role in the economy of the 21st century, there remain few better nanotechnology investments than Harris & Harris.

I am still preaching patience for long-term investors, but this is one of those times investors might want to buy on the dip because the market has overreacted to a non-event.

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Fool contributor Jack Uldrich is the author of two books on nanotechnology, including Investing in Nanotechnology: Think Small, Win Big. He owns stock in Harris & Harris. The Fool has a strict disclosure policy.