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Uber Shares Under Pressure: What is an IPO Lock-Up Period?

Madeleine Johnson

Shares of Uber Technologies UBER are falling, hitting a new record low after its IPO lock-up period expired on Wednesday. The ride-hailing giant went public in May at $45 per share, but its value has taken a hit since then. UBER stock is down almost 40% since it IPO, and now trades at just under $27 per share.

What is an IPO lock-up period?

An IPO lock-up period places a restriction on insiders from selling shares of a company’s stock before it went public. The types of insiders include a company’s founders, owners, managers, and employees, and the waiting period typically ranges from 90 to 180 days.

Lock-up periods are either required by the underwriters, or imposed by the company that is going public. Investors who want to learn about a company’s lock-up period can find all the information in its S-1 filing with the SEC.

IPOs like Pinterest PINS, Snap Inc. SNAP, and Zoom Video ZM all saw their share price impacted by the lock-up period expiration.

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Snap Inc. (SNAP) : Free Stock Analysis Report
 
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
 
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