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Uber's lock-up, the largest of 2019, is about to expire

October 30, 2019

On November 6, Uber’s lock-up period will expire, releasing 1.5 billion shares for trading. Uber’s lock-up is the second largest of a VC-backed IPO ever, behind Alibaba’s 1.6 billion shares. Other notably large VC-backed IPO lock-ups include JD.com (1.3 billion), Pinduoduo (1.0 billion), and Snap (957 million).

In the largest IPO of the year, Uber raised $8.1 billion at an $82 billion market cap, but the initial hype that surrounded Uber’s IPO didn’t follow it to market. The ridesharing giant dropped 8% on its first day and is currently down 25% from its IPO price. That said, early investors and employees are still sitting on large paper gains.

When a company’s lock-up expires, insiders are able to cash in on their shares for the first time post-IPO, which can cause the stock to trade off. In August, Lyft disclosed that it would be ending its lock-up period roughly one month early; its stock traded down 6% on the day of its announcement, while only trading down 2% on the day of its lock-up expiry. More recently, Pinterest’s and Zoom’s lock-ups expired, and both deals have traded down since then. The best performing IPO of the year, Beyond Meat’s lock-up expired yesterday and shares plummeted more than 20%.

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Below we highlight how the five VC-backed companies with the largest lock-ups traded around their expirations. Whereas Beyond Meat’s IPO success may have encouraged early investors to sell off their shares upon expiration and caused a steep drop ahead of hand, historical data suggests Uber’s lock-up expiration won’t be a major catalyst in its trading.


The 5 Largest VC-backed IPO Lock-up Expirations
Company 2 Days Before Lock-up Expiration 2 Days After
Alibaba (BABA)* -2% -3% -3%
Uber (UBER) - - -
JD.com (JD) -1% +2% -3%
Pinduoduo (PDD) +2% +1% +8%
Snap (SNAP) +4% -1% -3%
*BABA: Multiple lock-ups; represents trading around largest lock-up expiration.

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