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I thought it’s normal at IPO to have a lockup period of 90-180 days for staff preventing them selling shares.
by tiew9Vii 6y ago
I thought it’s normal at IPO to have a lockup period of 90-180 days for staff preventing them selling shares.
- archiepeach 6y agoWhy is that?
- phpnode 6y agoSo that all the employees and major stakeholders don't dump stock on day 1 and tank the price, often permanently affecting the company's perception in the eyes of investors
- goldcd 6y agoI don't think it's solely the "price-tanking", it ties them to the company for a while. i.e. If I was an investor looking to buy, I'd be a bit worried if the dev team would all be made instant millionaires on the day I bought in, with no incentive aside from salary to carry on working. You might find you'd just bought shares in an empty office.
- kgwgk 6y agoNot being able to sell the shares you own is separate from not owning shares in the first place.
- mytailorisrich 6y agoYes but that has to be set out in advance in the agreement and cannot be unilaterally decided on the day (which is how I interpret OP's comment).
- deleted 6y ago[deleted]