IPO Lockup
What is an IPO Lockup?
An IPO lockup is a period, usually 90 to 180 days after a company goes public, during which insiders, such as company executives and employees, are restricted from selling their shares. This lockup period helps prevent excessive selling that could destabilize the stock price.
Key Aspects of an IPO Lockup
- Lockup Duration: Typically lasts for three to six months after the IPO date.
- Purpose: Helps stabilize the stock price by preventing sudden sell-offs.
- Impact on Stock Price: The end of the lockup period can cause increased volatility as insiders may sell shares.