Lockup Period

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Definition

The time window (usually 6-12 months post-IPO) when executives and employees can't sell their stock. Ensures nobody realizes what insiders know about the company declining until it's too late.

Example Usage

My options finally unlocked today, which is perfect timing since the stock is at half what it was at IPO.

Origin

Regulatory requirement established by SEC; became standard in tech sector during 1990s IPO boom

Fun Fact

Lockup periods exist to prevent insider selling dumps, but insiders usually know before the public when to sell anyway

Source: Securities law and equity compensation

Related Terms

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