Lockup period

A lockup period is a window of time, commonly ninety to one hundred eighty days, after a company's IPO during which company insiders, early investors, and employees are contractually barred from selling their shares. It is meant to prevent a flood of selling right after a company goes public.

When the lockup period expires, a large number of new shares can suddenly become eligible for sale at once, which sometimes puts short-term pressure on the stock price if a meaningful number of insiders choose to sell.