What are you expecting at that point? FB's major lockup expiration (Nov 14 2012) was preceded by a dip a few days prior (not the lowest price in the previous few weeks though) and then went up on the lockup date.

Are you expecting a similar drop as news articles go out about the pending lockup a week/days before, followed by it going up after some people realise everyone knew about this all along?

FB had three lockup expirations and the first two caused dips.

And, essentially, yes. Most lockup expirations, in my experience, seem cause a meaningful dip in the company's stock price. This happened with Zillow a couple years ago, it just happened to Tableau last week, and it happened twice to FB, and those are just the examples I can think of off the top of my head.

By then, the market will have priced in the lockup expiration. It should, but is most certainly not, doing it at the IPO.

Totally disagree: http://aswathdamodaran.blogspot.com/2012/11/much-ado-about-l...

What is expected to happen when the lockup expires?

My guess is that the price drops because of so many employees selling at once, but I don't pretend to understand finance.

Right, exactly, it's a supply and demand thing. You have X shares trading on the market, and all of a sudden you have something like 3 or 4 * X shares trading hands. Unless there are, all of a sudden, a commensurate number of new share purchasers, it'll drive the price down.