3 ms·
Typically this would be prohibited (at least as an employee)
by echrisinger 3mo ago
Typically this would be prohibited (at least as an employee)
- cj 3mo agoIf you have holdings that are locked up, are you allowed to short stock or use options to hedge your position?
- unknownfuture 3mo agoNo. Typically lockup agreements prevent any kind of trading of derivative or synthetic positions (think: shorts, swaps, options, etc).
- BobbyJo 3mo agoAlmost certainly, outside of standard trade restriction windows. I don't think they have any control over what you do in the market outside of preventing insider trading.
- unknownfuture 3mo agoYes they absolutely can and do. Lockup provisions are contractual and typically quite strict.
- hobonation 3mo agoNo. Especially not if you have friends who could short the stock and you come to some sort of pocket agreement that never sees the light of day. Especially then.
- gretch 3mo agoWhat the law says and enforcement of the law are sometimes 2 different things, but generally employees should not be shorting their own stock, lock up or no lock up. The issue is that this creates a conflict of interest. In the worst case scenario, as an employee, you can literally do a bad thing to cause the stock to go down. E.g. An engineer can make a bug which blows up a rocket. So then you could short the stock, bug a rocket, and become super rich. It's the same issue with athletes betting on their own team - it's trivial to throw the game.
- hansvm 3mo agoMy holdings aren't even locked up, and I'm still not allowed to short my employer -- true as a matter of policy which could get me fired, and true from a US legal perspective most of the time given my role.
- axus 3mo agoI'm not an employee :)
- s1artibartfast 3mo agoSorta, there are no SEC requirements for lockup. It is all depends on the agreement between the IPO company and the IPO underwriters syndicate. Spotify and Slack notably skipped lockup entirely. Goldman Sachs, Morgan Stanley, BoA, ect are the ones who set the IPO lockup terms based on their risk and exposure post IPO. Indexes, exchanges, underwriters, ect are all private institutions who mostly can and do set their own rules.
- fsuts 3mo agoThe terms are public so you can read them Something like 20% can be sold after the q2 results are released
- s1artibartfast 3mo agoI am fully aware of the terms. There are lots of schedules. I was speaking to the origins of "prohibitions". It is also worth noting that typical lockup contracts can be waived early at the sole discretion of the underwriters.