Lock-up period
The window after an IPO in which insiders are forbidden from selling.
Typically 90 to 180 days. When it expires, a large volume of shares can suddenly become sellable, and prices frequently come under pressure.
Watching the lock-up expiry calendar tells you when supply is about to arrive, regardless of what the business is doing.
Who the first-day pop actually enriched
If the shares open 40% above the offer price, that 40% is money the company could have raised and did not. It went to whoever was allocated shares at the offer, which was not you.
It is a scheduled, predictable supply shock, which is a rare thing in markets.
Being surprised by a price fall on a date that was known in advance.
Related terms
See Lock-up period on a real company
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