Definition
A lock-up period is a specified period following an IPO during which insiders and major shareholders are restricted from selling their shares.
Related Services
Investment banking and legal services help companies structure and enforce lock-up periods to manage stock market behavior post-IPO.
Problem and Application
The lock-up period is intended to prevent market volatility caused by insiders selling off large amounts of stock immediately after the IPO.
Conclusion
Lock-up periods help stabilize stock prices after an IPO and prevent a flood of shares entering the market too soon.
