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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.

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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.

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