There is a more useful question than any of those:
who can sell their shares before you? This article is about the
supply calendar, which is what people who have done this for years actually
watch.
The 180-day lock-up is not what it was
The general belief is that after a listing, founders and large funds are locked
up for six months. That was true for a long time.
Today many deals include early-release clauses: if the price
holds a set percentage above the offer price for a certain number of sessions,
some early shareholders can begin selling far sooner.
The effect is counterintuitive and worth understanding: the better the
stock does, the earlier the exit door opens. Precisely when the most
people are buying for fear of missing out, a group appears that is cleared to
sell.
Three things almost nobody checks
1. Selling shareholders
When a company lists, people assume it is raising money to grow. Not always: in
many deals a portion of the shares offered belongs to existing investors. That
money does not go into the company; it goes into the seller's pocket. The
prospectus distinguishes the two, but you have to go looking.
2. Share-backed loans
Some funds do not even need to sell to get liquidity: they can borrow using the
shares as collateral. That monetises the position and cuts risk
without generating a visible sale in the market. To anyone
watching volume alone, nothing happened.
3. The tranche calendar
Releases are rarely a single event. They usually arrive in tranches tied to
dates or milestones — the first quarterly report, for instance — and each tranche
is a separate test for the price.
Why this matters now and will matter more
A newly listed share price forms with very little paper available. While supply
is scarce, buyers compete with each other. When abundance arrives, sellers
compete.
That is not a prediction of a fall: it is simply a change in who carries the
pressure. And it will repeat, because OpenAI and Anthropic are next.
The question worth asking
Before buying a newly listed company, the question is not whether the business
is good. It is whether you are buying the start of a great story
or the shares somebody has spent years waiting to sell. Both can
be true at once, and the difference is the price you pay.
Frequently asked questions
How long does an IPO lock-up actually last now?
The common belief is 180 days, and for a long time that held. Today many deals include early-release clauses: if the price stays a set percentage above the offer price for a given number of sessions, some early shareholders can start selling much sooner.
Why can a stock doing well work against you?
Because early-release clauses are triggered by price: the better the stock does, the sooner the exit door opens. Exactly when the most people are buying out of fear of missing out, a group becomes authorized to sell.
What should you look for in an IPO filing?
Three things: whether part of the offered stock belongs to existing shareholders — that money does not go to the company — whether there are loans collateralized by shares, which monetize a position without a visible sale, and the schedule of release tranches, which is rarely a single event.
