5 ms·

great read. levine points out that lockout periods are basically a condition for traditional IPOs by the lead investors, and isn't required in a direct listing.

by mylons 8y ago

great read. levine points out that lockout periods are basically a condition for traditional IPOs by the lead investors, and isn't required in a direct listing. assuming direct listings become a thing, inevitably there will be a big firm that does it and doesn't require a lockout period. i cannot wait to see what happens in that case.

aston 8y ago
Spotify skipped their lockout period, with pretty boring results.
- rwoods 8y ago
  Wouldn't "boring" results be good for Spotify? Rather than having tons of people selling right off the bat?
- mylons 8y ago
  ahh, neat! i assumed they didn't because i assumed levine would have said that in the article. maybe i just glossed over that part.
- ummonk 8y ago
  Spotify seems to have gone up in the months following IPO, which suggests there is enough liquidity on the market to absorb stock sales by employees and a lockout period is unnecessary.
  - mylons 8y ago
    hard to say with just 1 event. i could see interesting things happening if uber were to direct list without a lockout. there's a lot of hype, value, and losses.
Stratoscope 8y ago
Oh, I love lockout periods so much! About 20 years ago I worked for a company that went public, and for a while my shares were worth 1.2 million dollars. But I was locked up for 180 days. By the end of the lockup my shares were down to $10,000. A bit of a drop from the exciting heights of imaginary paper money I had earlier that summer. But hey, $10,000 I wasn't expecting is better than nothing, right? Well... Just before they went public they informed me that I needed to come up with $30,000 within 24 hours to exercise my options. So I maxed out my credit cards and got them the money. A few months later they told me, "Oops, we had you in the wrong category, you didn't need to pay us that $30,000 after all, so here's a check for your money back." With no interest, of course, while I'd been paying credit card interest on that money the whole time. Of course the executives and investors weren't locked up at all, and they got to take quite a bit of money off the table while the money was still good. Yes, I love lockout periods!

by mylons 8y ago

aston 8y ago

Spotify skipped their lockout period, with pretty boring results.

rwoods 8y ago
Wouldn't "boring" results be good for Spotify? Rather than having tons of people selling right off the bat?
mylons 8y ago
ahh, neat! i assumed they didn't because i assumed levine would have said that in the article. maybe i just glossed over that part.
ummonk 8y ago
Spotify seems to have gone up in the months following IPO, which suggests there is enough liquidity on the market to absorb stock sales by employees and a lockout period is unnecessary.
- mylons 8y ago
  hard to say with just 1 event. i could see interesting things happening if uber were to direct list without a lockout. there's a lot of hype, value, and losses.

Stratoscope 8y ago

Oh, I love lockout periods so much! About 20 years ago I worked for a company that went public, and for a while my shares were worth 1.2 million dollars. But I was locked up for 180 days. By the end of the lockup my shares were down to $10,000. A bit of a drop from the exciting heights of imaginary paper money I had earlier that summer. But hey, $10,000 I wasn't expecting is better than nothing, right? Well... Just before they went public they informed me that I needed to come up with $30,000 within 24 hours to exercise my options. So I maxed out my credit cards and got them the money. A few months later they told me, "Oops, we had you in the wrong category, you didn't need to pay us that $30,000 after all, so here's a check for your money back." With no interest, of course, while I'd been paying credit card interest on that money the whole time. Of course the executives and investors weren't locked up at all, and they got to take quite a bit of money off the table while the money was still good. Yes, I love lockout periods!