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How does the listing status affect employees with lockups? If you can't sell for a month (or whatever), wouldn't you benefit from any increase in price immediately after listing? If the price when the lockup period ends is the same, why would an employee care?

(I don't know how it works, I'm actually asking)

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The lockup period for an IPO is usually 6 months. That means that institutional investors have the opportunity to realize their gains any time post IPO, while employees have to count on the price to hold for that long before that can get any liquidity. Two or more earnings calls in the period add to the risk.

In a direct listing employees can sell on day 1, since there are no obligations to underwriters.

lockups aren’t specific to IPOs. Palantir shareholders are also subject to a lockup. They were only able to sell some fraction of their shares on Day 1.

The volatility may not directly impact employees with lockups, though there are two potential outcomes. First, the volatility could cause issues even after the 'cooling off' that would take place over that month. Second, the 'lost capital', which was captured by the investment bank is lost to the company, so the company is in a weaker state, both because having a weaker balance sheet is bad, and because it could have used the money.

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