Lock-up Period

A lock-up period refers to a specific timeframe after a company’s initial public offering (IPO) during which major shareholders, like company executives and insiders, are restricted from selling their shares. This period typically lasts for a few months to a year. The purpose is to prevent a sudden influx of shares on the market, which could lower the stock price. By ensuring that these shareholders hold on to their shares for some time, it helps maintain market stability and instills confidence among new investors in the company's long-term potential.