The underwriting agreement commonly requires that the original shareholders will not sell their shares for a period of ___________ after the underwriting.

Question

Quizplus · Accepted Answer

The underwriting agreement commonly requires that the original shareholders will not sell their shares for a period of six months after the underwriting. This is known as a lock-up period and is intended to prevent a flood of shares from hitting the market immediately after the IPO, which could drive down the stock price.

The Underwriting Agreement Commonly Requires That the Original Shareholders Will