Lock-up provision

In corporate finance, a lock-up provision is a contractual term that prohibits a shareholder from selling company stock for a period of time known as the lock-up period.^[1]

Lock-up provisions are commonly used to restrict pre-IPO shareholders from selling their shares once the company has been taken public so as to maintain the value of the stock.^[2]

References

↑ Mohan, Nancy J; Chen, Carl R (2001). "Information content of lock-up provisions in initial public offerings". International Review of Economics & Finance. 10 (1): 41. doi:10.1016/S1059-0560(00)00070-8.
↑ Estevez, Eric. "What Is a Lock-Up Period? How It Works, Main Uses, and Example". Investopedia. Retrieved 27 August 2025.

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[1] Mohan, Nancy J; Chen, Carl R (2001). "Information content of lock-up provisions in initial public offerings". International Review of Economics & Finance. 10 (1): 41. doi:10.1016/S1059-0560(00)00070-8.

[2] Estevez, Eric. "What Is a Lock-Up Period? How It Works, Main Uses, and Example". Investopedia. Retrieved 27 August 2025.

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Lock-up provision

See also

References