Employees at red-hot startups like Uber and Pinterest will soon be able to cash in their shares. Here are the 5 companies whose lockup expirations could spark a flood of selling.
- The market for initial public offerings started the year red-hot, with unicorns like Uber and Pinterest raising billions in their public debuts.
- But after a series of IPO flops and a pulled listing from co-working giant WeWork, newly public firms have started lagging behind the broader market - and the pain could get even worse.
- When companies go public, insiders such as employees are subject to a lockup period, or a specific set of time after the IPO when they can't sell their shares.
- The lockup period on several of 2019's largest IPOs are set to expire in the coming weeks, and it could spell trouble for stocks already struggling to gain a footing in the market.
- Here are 5 companies whose lockup expirations could ignite a flurry of selling.
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Now, after several IPO flops and following coworking giant WeWork's decision to withdraw its listing, investors and analysts have started casting doubt about the market for new public offerings - and they say the pain could get even worse.Some of 2019's largest IPOs will see their lockup periods expire in the coming weeks, which will allow company insiders to sell their shares.
When companies float stock in the public markets, insiders such as employees and early investors are typically bound to a lockup period, or a specific amount of time they have to wait before they can sell their stock.
There's no guarantee that insiders will sell out of their positions, but with many of 2019's most popular IPOs lagging behind the market, its possible some shareholders will want to minimize their losses as soon as they can.
Meanwhile, some companies have also exploded in value since their IPO, which can push insiders to sell as well because they want to cash out while shares are trading higher.
Here are 5 companies whose lockups could spark a flood of selling, listed in chronological order of expiration date: