4 ms·
Employees 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 mon
by Leherenn 5y ago
Employees 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.