A recent post to SeekingAlpha by Mazen Abdallah entitled "Beware Insider Selling in 'Small Float' IPOs" explores the impact of lockup expirations on the stock price of "small float" IPOs. Typically, roughly 20% to 30% (in my experience) of the company's shares are sold in an IPO. In a "small float" IPO, the amount of shares sold in an IPO is reduced (often between 10-15% in my experience) to create a supply-demand imbalance of too few shares and too much demand, typically resulting in a big first-day price increase. Mr. Abdallah explores what happens to these "small float" IPOs 180 days later when certain insider trading restrictions lapse and a large amount of shares becomes eligible for sale, reversing the supply-demand imbalance to too many shares and too little demand. Interesting reading.
Here's the link: http://seekingalpha.com/article/313611-beware-insider-selling-in-small-float-ipos
Here's the link: http://seekingalpha.com/article/313611-beware-insider-selling-in-small-float-ipos
