What Is a Lock-Up Period? (IPO Lock-Up Explained)
A lock-up period is a set window of time after a company’s IPO during which insiders — founders, employees, and early investors — are not allowed to sell their shares. Lock-ups typically last 90 to 180 days.
Why do lock-up periods exist?
- To prevent a flood of selling. If insiders dumped all their shares on day one, the price could crash.
- To build confidence. It signals that insiders are committed for at least the lock-up window.
- To protect new investors. It gives the market time to find a fair price.
Why lock-up expiry matters for the share price
When a lock-up period ends, a large number of new shares can suddenly hit the market. If many insiders decide to sell, the increased supply can push the share price down — at least temporarily. Experienced investors watch lock-up expiry dates closely.
This is one of the recurring reasons a stock “moves” — and exactly the kind of event we explain in our Why SPCX Moved Today posts.
What this could mean for SPCX
If SpaceX lists as SPCX, expect a lock-up period for insiders. The lock-up expiry date would become an important date to watch, because it could create downward pressure on the share price if insiders sell.
Specific SPCX lock-up terms will only be known once the official IPO prospectus is filed. Follow our IPO Tracker.
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Educational content only. Not financial advice.