Explainer
Lock-up Period
Post-IPO selling restriction
A window after an IPO when insiders are not allowed to sell their shares.
After a company goes public, early investors and employees often agree not to sell their shares for a set time, commonly 90 to 180 days. This is the lock-up period.
The goal is to keep a flood of insider selling from hitting the stock while it is still finding its footing. It also signals that insiders are committed to the company in its first months as a public business.
When the lock-up ends, a large number of shares can become tradable at once. Investors watch lock-up expiration dates closely because the extra supply can move the stock price.
Illustrative explainers. Figures in examples are hypothetical.