When Beyond Meat's IPO lockup expired, the market braced for a downturn, yet the stock defied expectations, surging 15.38%. This unexpected outcome reveals the complexities behind lockup periods, crucial for maintaining post-IPO stability amid potential market shocks.
Beyond Meat's lockup expiration on October 16, 2025 was the kind of event traders circle on the calendar. At 5:00 p.m. ET, 316 million shares came off restriction and the tape looked set up for a supply dump.
Instead, BYND ripped 15.38% intraday to $0.60 the next morning. That’s the point with lockups: the supply shock is real, but the price reaction isn’t always the obvious one.
Zooming out, the IPO backdrop in 2025 was anything but dead. Q3 2025 was busy, with 63–65 IPOs raising roughly $15.4–16B. That was the hottest quarter since 2021, which tells you liquidity and risk appetite were still there even with choppy markets.
Lockups matter because they control when that insider/early investor supply can actually hit the open market. Most are built around the classic 180-day window, and when they roll off, the float can change fast.
What Is an IPO Lockup Period, and Why Do Companies Use It?
An IPO lockup is a contract that stops insiders from selling right after the IPO. Most deals land in the 90–180 day range, with 180 days still the default. It’s not an SEC rule. It’s negotiated between the underwriters and the people who own the stock (founders, VCs, executives, employees).
The reason is simple: supply control. If founders and funds could hit the bid on Day 1, you could get a nasty air pocket from too many shares chasing the same buyers. The lockup gives the market time to build real two-way flow, lets institutions get positioned, and keeps the early post-IPO price from being purely a liquidity event.
Who’s usually locked up:
Founders, C-suite, directors
Venture capital and private equity holders
Employees with equity comp/stock options
The structure has been pretty consistent into 2025–2026, but you’re seeing more creativity. Some deals stagger the release (partial unlocks) or tie early release to performance triggers, which changes how the “supply day” plays out.
FINRA Rule 5131 adds a key guardrail: lockups for officers and directors generally can’t be waived unless the lead underwriter signs off. That keeps the bank in control of any surprise share release and reduces the odds of an ugly, unplanned dump.
What Happens When a Lockup Expires? Volatility, Selling Pressure, and Price Action
Lockup expirations are classic volatility catalysts. On average you often see a 1–3% drop around expiration, but the tails matter more than the mean—some names get smoked, others squeeze because positioning was one-sided. Q3 2025 Tech/Media/Telecom IPOs saw 22%+ drawdowns in some cases, which is what happens when a hot story meets a big float expansion at the wrong time.
Notable 2025 Lockup Expiration Examples
Company | IPO Date | Lockup Expiration | Share Impact | Stock Price Volatility |
|---|---|---|---|---|
Beyond Meat (BYND) | May 2019 | October 16, 2025 | 316M shares (37.45% float) | 15% intraday jump |
TMT Composite | Q1 2025 | Q3 2025 | Large-cap releases | 22%+ downside |
Early-stage Tech | Q2 2025 | Q4 2025 | Mixed float impacts | 2–8% typical decline |
Selling Pressure Mechanics
When the lockup comes off, the market has to digest a sudden jump in available float. VCs, early funds, and employees finally have liquidity, and some of that stock is going to get sold—sometimes because they want out, often because they need to rebalance or return capital. Volume usually spikes as desks and institutions try to warehouse the supply, and that’s where you can see the stock lean lower even if the long-term story hasn’t changed.
Market Conditions and Timing Influence
The same unlock can trade totally differently depending on the tape. In a strong risk-on regime, buyers can absorb supply and the “expected dump” turns into a non-event or even a squeeze. In a weak macro window—rates popping, spreads widening, small caps getting hit—unlock supply tends to land like a brick.
That’s why traders track lockup calendars the same way they track earnings dates: it’s predictable timing, but the reaction depends on positioning and liquidity.
How to Read Insider Selling After a Lockup Expiration
Understanding Insider Motivations
Post-lockup insider selling looks scary on a chart, but it’s not automatically bearish. A lot of insiders have been illiquid for years. When the window opens, they sell for normal reasons: paying taxes, diversifying away from a single-name risk, funding real-life obligations, or a VC distributing shares back to LPs.
Investor Perception and Regulatory Framework
That said, heavy selling can crush sentiment, especially if the stock is already trading heavy. The good news is you’re not blind. Form 4 filings show who sold, how much, and when. Insider trading rules still apply, so it’s not a free-for-all where insiders can legally dump on material non-public info.
Strategic Investment Approaches
How traders usually handle it:
Know the date: have the unlock on your calendar and understand how big it is versus float
Respect the digestion period: let the market show you where the new bid is after the supply hits
Watch volume + price together: heavy volume with no downside is different from heavy volume and lower lows
Separate flow from fundamentals: a good business can still trade poorly into a float event
Check 10b5-1 context: planned selling is different from discretionary “get me out” behavior
Long-Term Investor Perspective
If you’re investing on fundamentals, lockup volatility is often just noise—unless the unlock reveals there’s no real sponsorship under the stock. Strong names tend to stabilize once the marginal forced selling is done. Weak names don’t bounce because the unlock just exposes how thin demand really is.
Either way, keeping notes around prior lockups (float size, volume, reaction, time-to-stabilize) pays off the next time you trade a fresh IPO setup.
How Do IPO Lockups Work? Duration, Restrictions, and Compliance
Most lockups run 180 days from the IPO pricing date, but the term can move based on the deal. Smaller floats sometimes push for shorter windows to get liquidity sooner. Other names negotiate 90 days if the underwriter is comfortable with the supply risk and the shareholder base.
Key Restrictions During Lockup Period
During the lockup, insiders are typically boxed in on more than just selling:
No selling of locked-up shares
Limited transfers (often only things like estate planning or qualified charitable gifts)
No hedging (no collars, swaps, or other “synthetic sells” that sidestep the lockup)
Option exercise limits if it increases float earlier than intended
Ongoing insider-trading rules still apply regardless of lockup language
SEC reporting like Form 4 filings after ownership changes
Compliance and Enforcement
Enforcement is mostly contractual (the underwriter and company can come after you if you breach), but the SEC still has teeth on the broader securities law side. On top of that, Rule 10b5-1 trading plans now come with cooling-off periods: 90 days for officers/directors and 30 days for other insiders.
In practice, that can mean the “lockup is over” headline doesn’t equal “everyone can sell tomorrow.”
Example: an exec with 100,000 IPO shares can’t sell, transfer, or hedge during the 180-day lockup. After it expires, if they’re using a 10b5-1 plan, they may still be waiting out the cooling-off window before any sale can actually print.
Are IPO Lockup Periods Changing in 2025–2026?
Lockups are still mostly 180 days, but the packaging is changing. More deals are using staggered unlocks (for example, 20% at 120 days, the rest later), which spreads the supply shock across multiple dates. Performance-based triggers are also more common—earnings milestones, stock price thresholds, or liquidity conditions—so the “unlock day” isn’t always a clean calendar event.
SPACs are their own animal. Targets often follow something close to the standard lockup, while sponsors can be locked up for a year or more. That’s basically investor protection for the blank-check structure.
On the regulatory side, the SEC hasn’t signaled a forced redesign of lockups for 2026. The bigger practical constraints remain the layered stuff: Rule 10b5-1 cooling-off periods, Form 4 transparency, and whatever the underwriter will or won’t waive.
With IPO issuance picking up again (63–65 deals in Q3 2025), lockups go back to being tradable events. If you’re playing these names, you want the unlock size versus float, the shareholder mix (VC-heavy vs employee-heavy), and the broader tape. That’s usually what decides whether you get a grind lower, a clean flush-and-reclaim, or a weird BYND-style rip that punishes everyone leaning the same way.
How Do You Turn Lockup Volatility into Repeatable Trading Lessons?
Because lockup expirations are “known dates” with uncertain outcomes, they’re ideal for structured review. After each trade, document what you expected (supply vs float, insider mix, macro tape), what actually happened (volume response, time-to-stabilize, squeeze risk), and whether your execution matched the plan. Over a sample of unlocks, patterns usually show up: which setups fade cleanly, which ones reclaim after the first flush, and how often heavy volume without downside signals absorption rather than distribution.
That feedback loop is hard to build from memory alone. Using a trading journal to log entries, exits, notes, and post-event metrics makes it easier to separate process from outcome and refine decision-making ahead of the next IPO catalyst. For traders who want a consistent workflow, a tool such as Rizetrade trading journal analytics dashboard for tracking PnL, statistics, and trade notes can help organize those observations into comparable data, so each lockup becomes a test you can measure and learn from.