Lock-up period

A lock-up period is a set timeframe after a company goes public (IPO) when company insiders—like founders, executives, and early investors—are legally prohibited from selling their shares. You'll see this mentioned in SEC filings because it's a rule designed to prevent a flood of insider selling that could tank the stock price right after the IPO. Typically lasting 180 days, lock-up periods protect regular investors from sudden supply shocks. For example, if TechStartup Co. goes public and has a 6-month lock-up, the CEO can't sell her shares until that period ends. When lock-up expires, watch out—sometimes insiders do sell, which can pressure the stock.