Lock-Up Period

A window after an IPO when insiders cannot sell shares.

A lock-up period, often 90 to 180 days after an IPO, prevents company insiders and early investors from selling their shares. It prevents a flood of supply from crashing the new stock. Prices often dip when the lock-up expires and insiders are free to sell.

When the post-IPO lock-up period expired, insiders were finally free to sell and the stock dipped.