[btilly]

This was listed as, I think, a positive but I see it as an extreme negative. Why invest in your company if you don't have the conviction that it will be worth more 3-6 months from now.

You are thinking as a potential new investor, and your interests are not aligned with employees and early investors.

Employees and early investors have had what is likely to be a large fraction of their net worth tied up in one company for a long time. They have a clear incentive to take some of that money out and diversify their risk. You, as an outside potential investor, are looking to put a small fraction of your net worth into a hopefully good opportunity.

Yes, you would like to believe that everyone who owns the stock believes in it with their heart and soul, and wants to invest in it forever. And yes, you would like to have the supply of stock limited as long as possible by keeping insiders out of the market. While you're continuing to wish, you'd wish that all employees were happy, and productive, with no desire to ever do anything by slave away creating value.

None of these wishes are reasonable from the point of view of real people who have sacrificed years of their life creating the company that you're looking at.

I think they are right but they really have no proof that they avoided the IPO pop discount. They actually opened trading at $165.90 and closed at $149.01.

You are trivially right that they can't PROVE that they would have had to pay a pop discount the other way, but the odds are that they would have. Typically the pop is 15-30% on the first day. That's a lot of money.

[chollida1]

Maybe I wasn't clear but I don't think I ever setup the straw man you knocked down saying an employee shouldn't ever be able to sell.

All I said was its very reasonable, as evidenced by the fact that every IPO over the past 40 years has had a lockup, to have a 3-6 month hold period for existing share holders when you go public.

That's it. I( and GOOG, FB, AMZN, SNAP, and the rest of the entire tech community that went public ) all believe that a 3- 6 month hold window is a very reasonable ask given that they all had one.

Sorry if I confused you, I hope this clears things up:)

[btilly]

You did not fully set it up. However you did say, in so many words, that having insiders wanting to sell is a very negative sign about the company. And said it criticizing the lack of a period where insiders were locked out of the market.

It is normal for banks conducting an IPO to want one set of things, and for early employees and early investors to want another. Both lockup periods and a chance to have an IPO pop are things that banks conducting an IPO want to have. The company itself has no desire for either, but are pushed into them.

It is normal to hand over as much as a quarter of a company's value to rich people who are lucky enough to get into an IPO. It is normal to force early employees to stay out of the market for an extended period of time. I personally know a number of people who during the dot com crash wound up with a tax bill that exceeded their salary and no way to pay it. (Their company IPOed, thereby locking them in under AMT rules. By the time they could sell, the dot com crash had happened and they didn't make enough to pay their taxes.)

The fact that these things are normal does not mean that they are fair and reasonable. Just that they are business as usual.

It is no surprise that a company which bucked Wall St on one issue would challenge both of them.

[aqme28]

If you're worried about employees unloading shares and tanking the price, then hold off for a few days and buy the stock at a discount.

Historical use of a lockup isn't a reason to continue doing them.