Lock-Up Expirations

After an IPO, insiders and early investors are usually barred from selling for a set period. When that lock-up ends, a flood of shares can become available. Here is how lock-ups work and how they can affect the stock.

What a lock-up is

A lock-up is an agreement between the underwriters and existing shareholders, such as founders, employees and venture investors, not to sell their shares for a period after the IPO. The most common length is 180 days, though some deals use 90 days or release shares in stages tied to results or the stock price.

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