A period of time after a company completes its initial public offering (IPO), when executives, employees and other inside shareholders are prohibited from selling their company stock. Specific terms depend on the agreement the company has with the investment bank underwriting the IPO, but a typical lockup period includes the six months following the IPO. The intent is to promote pricing stability immediately following the IPO.
A lookback provision allows the employee participant of employee stock purchase plan to purchase shares of stock at the better of the purchase date price or offering date price.
See high basis/low basis stock.
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