How to trade the lockup period
Companies such as Facebook and Groupon have seen their shares dip quite a bit at the end of their respective lockup periods. When a company files for an IPO, the shares sold to the public are a combination of both primary (newly issued shares) and secondary (existing shareholders).
For monkeys that have worked on an IPO before or traders that trade on lockup periods, how do we know how much supply (shares) will flood the market at the end of the lockup period? Are the secondary shares the ones locked up? Or is it that at the end of the lockup period, insiders or affiliates can start trading small blocks?
How do you guys play this?
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