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Comment by econner | Hacker News Reader

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econner·

Quick research suggests this timeline to me:

Summer 2014 Apigee raises last private funding at a $600M valuation

April 2015 Apigee IPOs at a valuation of $500M

By end of 2015 Apigee closes at a valuation of ~$250M.

So the company lost almost 2/3rds of its value probably right as the lockup period was expiring for employees to sell shares.

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Ouch. What is the justification for the lock up period? Is the idea that employees are somehow going to flood the market? Is the volume of vested options for the average worker bee really that high at the time of IPOs? Its seems like the plebes get burned a fair amount.

Yea, it's to keep the price somewhat stable after the IPO. It's a very standard thing to do and the share price of a company usually drops permanently when the lock up period expires.

Maybe a good rule of thumb is 10-20% of the company could be owned by employees at the time of IPO which could materially change the share price.

Well, yes, but the acquisition in Sep 2016 (referenced in another reply to this comment) was just over the IPO price: https://techcrunch.com/2016/09/08/google-will-acquire-apigee...

Facebook had a similar valuation decline, then a bounce back.

So those who had faith in the company for another year saw modest gains compared to 1.5 yrs ago at IPO.

Another option is that the value dropped because of the lockup period expiring?

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