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>6-month lockup to keep everyone from cashing out on IPO day This is a bit off-topic, but something I've always wondered. What if the lockup period was stagger
by howdydoo 5y ago
>6-month lockup to keep everyone from cashing out on IPO day
This is a bit off-topic, but something I've always wondered. What if the lockup period was staggered per-employee across those 6 months? i.e. say you have a 180-day lockup, and 900 employees. On day 1, the 5 longest-tenured employees can sell. On day 2, the next 5, etc, and on day 180, the last 5. This avoids the IPO crash on day 1, and also avoids a crash 6 months later. Would something this be feasible?
- late2part 5y agoThis is fantastical. The reason it's not done is because there are well established ways to do it that work other than this.
- dehrmann 5y ago> also avoids a crash 6 months later Does this actually happen? And if it does, surely some hedge funds are trying to cash in on this, shorting in the days leading up to it, then covering as insiders sell.
- AlbertCory 5y agoI can tell you from personal experience that yes, it does. Or at least it did, when our IPO happened, around 2000. I don't know how hedge funds played it. Shorting is always dangerous when you don't know who out there might buy on the dips.