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What happens after lockup expires?
by politelemon 5y ago
What happens after lockup expires?
- Leherenn 5y agoEmployees who own shares before the IPO are often prevented from selling them right as the company IPO, that's the lockup period. After this period (often 6 months), they are allowed to sold their shares. The reasoning of GP is that a lot of shares will be sold right after the lockup expires (because employees want to cash-in/diversify), artificially depressing the price.
- oblio 5y agoAre the executives included in these measures?
- nullspace 5y agoYes, and even investors.
- financetechbro 5y agoYes. However, a significant portion of Tech IPOs have a modified lockup which allows selling of a portion of lockup shares based on some event triggers (earnings release + stock performing +x% from issuance price). Lockup agreements are negotiable and can vary from one IPO to another.