Lockup Expirations Hurt Speculative Stocks More
The irony: the date is printed in the prospectus months ahead, yet retail investors get blindsided every time.
When a high-momentum stock hits its lockup expiration, two things collide: a surge in available supply and a pool of early holders sitting on large unrealized gains. The result is rarely orderly.
Palantir is the cleanest example. Retail enthusiasm drove the stock from $10 to levels near $40 between its September 2020 listing and February 2021. When the lockup expired, insiders, including Peter Thiel, sold tens of millions of shares into that premium. The stock fell 13% in a single session and spent months recovering. Rivian (RIVN) dropped about 20% in one day after Ford (F) disclosed it would sell its stake at the 180-day mark. Uber (UBER) hit an all-time low on its expiration date, down 40% from its IPO price. Even Snowflake, which used a staggered schedule, still dropped roughly 11% over its final expiration week. The pattern holds across cases: the higher the speculative premium at IPO, the more painful the expiration tends to be.
What ****** eX Is Doing Differently
The irony: the date is printed in the prospectus months ahead, yet retail investors get blindsided every time.
When a high-momentum stock hits its lockup expiration, two things collide: a surge in available supply and a pool of early holders sitting on large unrealized gains. The result is rarely orderly.
Palantir is the cleanest example. Retail enthusiasm drove the stock from $10 to levels near $40 between its September 2020 listing and February 2021. When the lockup expired, insiders, including Peter Thiel, sold tens of millions of shares into that premium. The stock fell 13% in a single session and spent months recovering. Rivian (RIVN) dropped about 20% in one day after Ford (F) disclosed it would sell its stake at the 180-day mark. Uber (UBER) hit an all-time low on its expiration date, down 40% from its IPO price. Even Snowflake, which used a staggered schedule, still dropped roughly 11% over its final expiration week. The pattern holds across cases: the higher the speculative premium at IPO, the more painful the expiration tends to be.
What ****** eX Is Doing Differently
2 months ago
