Lock-Up Period

See: 144a. See: Lock-Up Provision.

The period in which an insider is locked up is the lock-up period, usually 6 months and change for normal IPOs.

Regulators make this provision so that vastly-more-knowledgeable insiders can't just dump their shares at a high price, run for the hills, and leave Joe Public holding the bag with shares she paid $30 a share for...trading 6 months later for $10.

This phenomenon also happens when too much oatmeal is consumed. We suggest prunes.