Lockup Agreement

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Lockup Agreement

Where the purchaser of securities agrees not to sell the securities for a certain period of time (the lockup time).
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Lockup Agreement

1. See: Crown jewel lockup agreement.

2. During an IPO, a contract prohibiting executives, underwriters, and/or venture capitalists from selling their shares in the company for a certain period of time. The period of time is usually about six months, but may be longer or shorter. A lockup agreement exists to reduce the pressure for volatility as the company goes through its first few months of public trade.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

lockup agreement

A contractual offer of valuable assets or stock made by a takeover target to the suitor deemed most acceptable to management. A lockup agreement tends to discourage unwanted suitors, but it may penalize the target firm's stockholders because it eliminates counteroffers. Also called crown jewel lockup agreement.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
As of December, there were about 130 boys housed at the Evins lockup, according to agency records.
the rightholder would profit more from the lockup in the event of an
According to Business Insider, Pincus argued that the suit should be waived because he and the Zynga board agreed only to sell 20 percent of their stock holdings, putting the remainder on a lockup agreement that lasted into the summer of 2012.
However, firms need to keep tight control of costs and lockup to ensure that fee income coverts into profits and cash flow remains healthy."
“I am excited to participate in the 2013 New Bern Lockup for the MDA,” said Van Horn.
When corporate insiders of IPO firms sell shares shortly following lockup expiration, they generally state that they are doing so in order to diversify their portfolios or meet their liquidity needs (Maremont, Ewing, and Egodigwe, 2000; Bryan-Low, 2001).
According to the report, lockups, which typically last 90 to 180 days, are designed to prevent the market from being swamped with too many of a company's shares immediately after an IPO, as keeping the amount of stock scarce can help boost the price.
The top six M5 stockholders, representing approximately 66 percent of the shares issued in conjunction with the acquisition of M5 Networks (now ShoreTel's cloud division, which offers the ShoreTel Sky solutions), have voluntarily displayed a vote of confidence in ShoreTel's strategic direction after the initial lockup restriction period of six months expired this week.
Director Peter Thiel, an early investor in Facebook, sold more than $1 billion worth of Facebook shares in the IPO and after the end of the first lockup, a move that analysts and other venture capitalists described as 'unprecedented.'
"Even the investors that I talk to who want to buy the stock and like the company are not sure if they can stomach the lockups."
Recently she went onto UTV Bindass Love Lockup. No, she aint there for the love ka last chance but to be the "sutradhar" to the celebrity couple, Krushna Abhishek and Kashmira Shah, who are going into the Love Lockup to solve their love issues.
ISLAMABAD, July 17 -- Islamabad police on Friday signed a memorandum of understanding (MoU) with Sustainable Development Policy Initiative (SDPI) to improve the lockups' condition and make joint efforts to resolve the problems of prisoners.