Traditional six-month lockups are easing for insiders wanting to sell stock after a company goes public.
Tiered lockups aim to avoid the steep share-price drop that can be triggered when a big chunk of stock is released on a single day. In November 2019, Uber Technologies Inc. lost $2 billion in market capitalization in 24 hours when shares subject to a traditional lockup were released.
In the past 12 months, several companies have experimented with looser lockups. In September, 2020 data-warehousing company Snowflake Inc. said employees could sell as much as 25% of their vested stock after roughly three months. Then Airbnb Inc. said it would allow employees to sell up to 15% of their shares in the first seven trading days.