Lock Up Company Article For Free

up period is a window of time when investors are not allowed to redeem or sell shares of a particular investment. There are two main uses for lockup periods, those for hedge funds and those for startups/IPO's.

Following the expiration of the lockup period, restrictions preventing a company's employees and other major shareholders from selling their stock are lifted. Lockup expirations often coincide with a 1-3% drop in the company's stock because of the increased number of available shares in the company.

In the lock-up agreement, the stockholder agrees that it will not sell its shares of the company for a specified period of time after the effective date of the registration statement or after the date of the underwriting agreement.

To discover if a company has an IPO lockup period, you can contact the company's shareholder relations department. Another option is to get this information online using the SEC's EDGAR database. Some commercial websites also track when companies have their IPO lockup period set to expire.

Market websites: Free websites like Yahoo Finance, Market Screener, FT Markets and Reuters aggregate data from public sources to create lists of top shareholders. Generally, these websites show a company's largest shareholders, so they should not be considered complete.

The purpose of an IPO lock-up period is to prevent insiders from inundating the market with large numbers of shares as they become public, which could initially depress the stock's price.

IPO investors can track upcoming IPOs on the websites for exchanges like NASDAQ and NYSE, and various specialty websites. These include: Google News, Yahoo Finance, IPO Monitor, IPO Scoop, Renaissance Capital IPO Center, and Hoovers IPO Calendar.