Lock Up Amount Document For Free

What Is a Lock-Up Agreement? A lock-up agreement is a contractual provision preventing insiders of a company from selling their shares for a specified period of time. They are commonly used as part of the initial public offering (IPO) process.

What Happens After the IPO Lockup Period? Once the IPO lockup period ends, insiders are allowed to sell their shares with few or no restrictions. Typically, this leads to a wave of selling activity ? at the end of an IPO lockup period, most stocks experience a prolonged price drop of 1-3%.

up agreement is a legally binding contractual provision that prohibits company insiders from selling their shares in a company for a specific period of time. These contracts are usually used during the initial public offering process to prevent excessive selling of stocks in the first few months of trading.

Key Takeaways An IPO lock-up is period of days, typically 90 to 180 days, after an IPO during which time shares cannot be sold by company insiders. Lock-up periods typically apply to insiders such as a company's founders, owners, managers, and employees but may also include early investors such as venture capitalists.

up period, also called a lockedup, lockin or lockout period, refers to the predetermined time frame in which corporate insiders, investors, and employees are not allowed to sell or redeem their shares after an initial public offering (IPO).

The purpose of an IPO lock-up period is to prevent insiders from inundating the market with large numbers of shares as they become public, which could initially depress the stock's price.

In the case of an initial public offering (IPO), the underwriters will seek to obtain lock-up agreements from all, or substantially all, the existing securityholders for a period of 180 days, subject to some limited carve-outs.