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Comment by roowife | Hacker News Reader

I'm not surprised. Most of the staff and ex-staff I know were told just this morning that they were limited to selling <10% of their shares, with another 10% in a few months if they've gone up 30% in price! Most of them had instructed to sell everything today. Hardly a vote of confidence.

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I thought it’s normal at IPO to have a lockup period of 90-180 days for staff preventing them selling shares.

Why is that?

So that all the employees and major stakeholders don't dump stock on day 1 and tank the price, often permanently affecting the company's perception in the eyes of investors

I don't think it's solely the "price-tanking", it ties them to the company for a while.

i.e. If I was an investor looking to buy, I'd be a bit worried if the dev team would all be made instant millionaires on the day I bought in, with no incentive aside from salary to carry on working. You might find you'd just bought shares in an empty office.

Not being able to sell the shares you own is separate from not owning shares in the first place.

Yes but that has to be set out in advance in the agreement and cannot be unilaterally decided on the day (which is how I interpret OP's comment).

Selling 10% regardless of price is the logical and rational decision for any employee with a meaningful stake. If you have 6 or 7+ figure into the stock, slowly diversifying is the only sound thing to do, even if you still strongly believe in the company.

Most of them don't and wanted to dump everything. If you have 6 or 7 figures IMO that is life-changing and you are better diversifying it immediately.

source? big if true.

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