Definition
A lockup period is a contractual restriction preventing company insiders (executives, employees, early investors) from selling shares for a set time after an IPO, typically 90-180 days. Lockup expiration can cause selling pressure and price volatility as previously restricted shares become tradeable.
Example
After a company's IPO, executives must wait 180 days before selling. The lockup expiration date often brings increased selling pressure.
FAQ
What is Lockup Period?
Time after an IPO when insiders cannot sell their shares.
Why is Lockup Period important?
Lockup Period helps investors evaluate IPO and make more informed decisions.