IPO Lock-Up

(redirected from Initial Public Offering Lock-Up)

IPO Lock-Up

A practice in a publicly-traded company that forbids management and large stockholders from selling their shares for a period of time following an initial public offering. Depending on the company, the IPO lock-up usually lasts 90 to 180 days. It exists to ensure that the market is not flooded with shares in the company at any given time, which would increase supply and cause a drop in price. Large shareholders selling their shares may also be seen as equating to a lack of confidence in the company, triggering a panic sell.
References in periodicals archive ?
In connection with the offering, Cvent, its directors and executive officers, and all selling stockholders have agreed to lock-up agreements that will extend the initial public offering lock-up period until 90 days after this follow-on offering.
Related to the offering, Cvent, its directors and executive officers and all selling stockholders have agreed to lock-up agreements that will extend the initial public offering lock-up period to 90 days after this follow-on offering, which is being made under an existing effective registration statement filed with the US Securities and Exchange Commission.
Underwriters have been granted a 30-day option to buy up to another 750,000 common stock from some of the selling stockholders and under the offering, all selling stockholders and some other stockholders agreed to lock-up agreements that extended the initial public offering lock-up period on their remaining shares until 90 days after this offering.
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