Lock-Up Period.

In plain English

A lock-up period is a stretch of time, often around 90 to 180 days after a company goes public, during which insiders (founders, employees, and early investors) agree not to sell their shares. The point is to keep a flood of insider selling from crashing the price right after the stock starts trading. The exact length is set by agreement, not by law, so it varies from company to company. When the lock-up ends, those insiders are free to sell, and the extra supply can push the price down. The end date is public information you can look up before you buy.

01Why it matters

If you buy a freshly public stock, a lock-up expiration can flood the market with insider shares and drag the price down on a single date you could have seen coming.

02The math, step by step

A company goes public with a 180-day lock-up. For the first six months, its founders and employees cannot sell, even if the stock doubles. On day 181, millions of insider shares become sellable at once. If many insiders cash out, the added supply can push the price lower that week, regardless of how the business is actually doing.

03What this is NOT

04Receipts

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