Market Standoff Agreement
 |
Definition of 'Market Standoff Agreement'An agreement that prevents insiders of a company from selling their shares in the market for a specified number of days subsequent to an initial public offering (IPO). The agreement is executed between the underwriters to the issue and the company's insiders. The term during which insiders are prohibited from selling their shares consequent to a market standoff agreement is generally 180 days, but can vary from as little as 90 days to as much as one year. |
 |
Investopedia explains 'Market Standoff Agreement'Market standoff agreements are used to avoid precipitous declines in a stock after it commences trading because of massive insider sales. When the dotcom boom turned to bust from 2000 onwards, numerous stocks in the sector lost a major chunk of their market capitalization within weeks of the expiry of such lock-up agreements, an alternate term for market standoff agreements. |
Related Definitions
Articles Of Interest
-
5 Tips For Investing In IPOs
Thinking of investing in IPOs? Here are five things to remember before jumping into these murky waters. -
IPO Lock-Ups Stop Insider Selling
Ownership plays a key role when companies go public. Find out how. -
What exactly is a company's float?
The term "float" refers to the regular shares that a company has issued to the public that are available for investors to trade. This figure is derived by taking a company's outstanding shares ... -
A Look At Primary And Secondary Markets
Knowing how the primary and secondary markets work is key to understanding how stocks trade. -
The Road To Creating An IPO
Through an Initial Public Offering, or IPO, a company raises capital by issuing shares of stock, or equity in a public market. Generally, this refers to when a company issues stock for the first ... -
Learn The Lingo Of Private Equity Investing
Because of the non-public nature of private equity, it can be difficult to the learn the lingo. We break it down here. -
Digging For Profitable Delistings
Deregistration can provide opportunities for savvy investors. We'll show you how to cash in. -
Coty Readies IPO
Fragrance maker Coty filed a registration statement amendment May 28 that sees it raising as much as $1.2 billion from its IPO. Coty tried to buy Avon for $10.7 billion in 2012 but was unsuccessful. ... -
Ski-Doo IPO Raises $254 Million: Should You Buy?
Read on and I'll look into if you should buy Ski-Doo's stock once it becomes available. -
Interpreting A Company's IPO Prospectus Report
Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future.
Free Annual Reports