Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

The lock-up period is set by the investment bank, in this case Morgan Stanley. Just to be clear, a lock-up period is not required by the SEC. But all investment banks who underwrite IPO's require them to prevent insiders dumping the stock on the first day and hurting the banks clients who the bank convinced to buy the stock.

In general lockup periods are 180 days but I have seen 90 days in rare cases.

I'd imagine giving preferred employees a shorter lock-up would raise hell. Having said that, if you read the S1 it sounds like Morgan Stanley and Groupon have the right to extend executive lock-up by 18 additional days without notice and employee lock-up by 34 days. So there is some differentiation between stockholders.



Why is that lockup not 34 days for execs and 18 days for employees?


Simple, because the execs are the one who negotiate the lockup, not the employees.


My guess is because execs have a much higher % of stock.


I don't think too many people would object to the lockup period being based on join date. Ex: 30 days minus one day for each month you've been working at the company.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: