Re:WeWork’s Adam Neumann Steps Down as CEO
by jwc1 on Tuesday September 24, 2019 @02:06PM
(#21062973)
In a traditional IPO, there is generally a 90-180 day lockup period for existing shareholders (to prevent shares from flooding the market on day 1). This is one of the big benefits of a direct listing (see Spotify/Slack)...any shareholder can sell stock on day one.
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Re:WeWork’s Adam Neumann Steps Down as CEO
by dehrmann on Tuesday September 24, 2019 @02:42PM
(#21063309)
> to prevent shares from flooding the market on day 1
These are common, but I don't think they apply to all share classes, so the big boys are free to get their money out.
Re:WeWork’s Adam Neumann Steps Down as CEO
by rainyMammoth on Tuesday September 24, 2019 @03:04PM
(#21063498)
usually it doesn't apply to the "Big" VCs and founders. So they are quietly able to get out before the stock crashes a couple months later.
Re:WeWork’s Adam Neumann Steps Down as CEO
by jwc1 on Tuesday September 24, 2019 @07:51PM
(#21066025)
Could you share some examples of that occurring? To my knowledge, a lockup period is almost always a standard requirement from the underwriter (on any larger IPO), and in some states is even required as part of their Blue Sky Laws.
If a founder/VC wants to get out before the IPO, they usually just do so on the secondary market. Example: Benchmark cashing out a portion of their Uber stake to SoftBank pre-IPO.