Lock-Up Period

A "lock-up period" is a predetermined amount of time following an initial public offering ("IPO") where company insiders or large shareholders, such as company executives and investors representing considerable ownership, are restricted from selling their shares. Lock-up periods are designed to prevent insiders from liquidating assets too quickly after a company goes public, helps stabilize the stock price after it enters the public market, and, dependent on the company, typically lasts between 90–180 days.

The SEC does not require companies that are going public to have a lock-up period. Rather, the lock-up period is something that is instituted by the companies themselves and/or the investment banks underwriting the IPO.
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