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Fox Entertainment Group (FOX) Message Board

  • Havoc110 Havoc110 Apr 7, 1999 7:50 PM Flag

    Lock-Ups info.

    Tracking Internet Stocks? Watch Those
    Lock-Ups

    Isabella Ingravallo

    We've seen it time and time
    again. Hot IPOs that finish up 300% or more in their
    first day of trading. But much to their
    chagrin,
    insiders can't dump their highflying shares right away.
    They must sit on their hands for six months (though
    some lock-up periods
    are shorter), until trading
    restrictions expire. This is known as the lock-up period in
    Wall Street parlance.

    That six-month period
    bears close watching by investors. A post-lock-up
    sell-off can bring a lot of stock onto the market,
    which
    can ultimately drive a company's share price straight
    into the ground. Conversely, this can present a buying
    opportunity for
    investors, but they should take into
    account the proportion of a company's total shares held
    by insiders.

    But insiders don't always rush
    to the exits as soon as they can.

    Just look
    at online auctioneer eBay Inc. (NASDAQ:EBAY - news)
    . Insiders could have dumped 29 million shares on
    the market on January 29, 1999 -- the end
    of their
    unusually short, 120-day lock-out period. With a total of
    only about 3.5 million shares on the market, many
    feared the worst for eBay's stock price.


    Investors in eBay had seen a towering gain from the IPO
    price of $18.00 on September 23,1998 to a closing price
    of $97.54 the day before the lock-up ended.
    If
    insiders had decided to cash out, individual investors
    faced the risk of their gains disappearing in a matter
    of hours.

    Bottom Line:

    Keep an eye on
    the following companies, as they have lock-up
    expirations coming up over the next three to four months: Fox
    Entertainment Group (NYSE:FOX
    - news) , expiring in May,
    UBID Inc. (NASDAQ:UBID - news) expiring in June,
    Concur Technologies (NASDAQ:CNQR - news) expiring in
    June and
    Marketwatch.com (NASDAQ:MKTW - news)
    expiring in July.

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