The lock-up period is the period of time
A)during which a firm's management is prohibited from discussing any matters relating to an upcoming IPO.
B)during which auditors prepare the financial statements necessary for the filing of the preliminary prospectus.
C)between the filing of the preliminary prospectus and receiving SEC approval.
D)during which insiders are not allowed to sell their shares after the initial public offering.

Question

Quizplus · Accepted Answer

The lock-up period is the period of time during which insiders, including company executives, employees, and early investors, are restricted from selling their shares after the initial public offering. This is to prevent a sudden influx of shares into the market that could potentially decrease the stock's value. The lock-up period is the period of time during which insiders, such as executives and major shareholders, are prohibited from selling their shares after the initial public offering. This is typically done to prevent a flood of insider selling immediately after the IPO, which could depress the price of the stock.

The Lock-Up Period Is the Period of Time