A lock-up agreement prevents the sale of "insider" shares for a specific time period-often 12 to 36 months-after an initial public offering.

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A lock-up agreement typically does prevent insiders (such as company employees and early investors) from selling their shares for a certain period of time after an IPO. This is done to prevent a sudden flood of shares hitting the market, which could drive down the share price.

A Lock-Up Agreement Prevents the Sale of "Insider" Shares for a Specific