Lock-Up Period

A post-IPO period (typically 90-180 days) during which insiders cannot sell their shares.

What Is the Lock-Up Period?

The lock-up period is a contractual restriction that prevents company insiders (executives, employees, early investors) from selling their shares for a specified period after an IPO — typically 90 to 180 days.

Why Lock-Ups Exist

Lock-ups prevent a flood of insider selling immediately after an IPO, which would depress the stock price and undermine investor confidence. They give the market time to establish fair pricing based on public information and early earnings reports.

Lock-Up Expiration

When the lock-up expires, it creates a significant event. Suddenly, millions of shares held by insiders become eligible for sale. Stocks often decline 1-3% around lock-up expiration dates, even if no insiders actually sell, simply due to the potential selling pressure. Smart investors track these dates and factor them into their analysis.