[cfitz]

I wonder if lockup agreements will ever be made illegal.

I doubt it, since they’re primarily there to ensure the original investors get an ROI, but they sure seem to be an overall negative incentive for the general public / retail traders to purchase stock with lockup agreements, given the earliest they can buy is right when the IPO pops.

[lmm]

> I doubt it, since they’re primarily there to ensure the original investors get an ROI, but they sure seem to be an overall negative incentive for the general public / retail traders to purchase stock with lockup agreements, given the earliest they can buy is right when the IPO pops.

That seems slightly backwards. The lockup protects buyers in the IPO more than sellers: it means you can be confident that the market isn't going to be flooded tomorrow. Anyone who bought in the IPO has now had plenty of time to get out, if they wanted to.

[pbreit]

It's crazy that in 2019 investment banks are still using such a blunt instrument to manage shares becoming available for trading. It would be trivial to let insider shares trickle out for some period of time enabling insiders to monetize while avoiding a plunge.

[pavlov]

Direct listings don't have lockups. Spotify and Slack have used this method to go public in recent years.

The stock prices of those two companies don't seem to have benefited much from the immediate liquidity though.