Looks like DataDog satisfied a requirement of being above 33% of their IPO price for 10 of 15 days on the 90th day from September 18th so on December 10 it will release 20% of the shares from the lockup agreement:
https://investors.datadoghq.com/node/6756/html
DataDog down after hours by 3% and change due to this, I picked up some shares afterhours, who knows how much lower it will go on Monday though once the shares are released.
Believe or not, DDOG closed at $35.91 today, exactly 133% of the IPO price. So, clearly somebody is manipulating the market.
New to this
What usually happens with stock prices during the release of shares after a lockup period?
Lock up prohibits insiders from selling shares until the lock up date. So like anything, when a market is flooded with shares there is an over supply and the price can drop. So maybe some employee’s etc. want cash and now all of a sudden they can sell and get that cash. You have a surplus of shares for sale.
Lock up prohibits insiders from selling shares until the lock up date. So like anything, when a market is flooded with shares there is an over supply and the price can drop. So maybe some employee’s etc. want cash and now all of a sudden they can sell and get that cash. You have a surplus of shares for sale.
Sometimes that happens. Sometimes, it’s almost the opposite. People sell prior to the lockup, or even short the stock, fearing this potential dip. Then, when the lockup actually arrives, they hope for a dip to get back in or cover their shorts. There end up being more buyers than sellers, and the price goes up instead.
I’ve seen both.
Bear
Re: “What usually happens with stock prices during the release of shares after a lockup period?”
Only 20% of the locked up shares will become tradable tomorrow. I believe that’s a little over 50 million shares; perhaps someone here knows the exact number.
What usually happens when the supply of anything increases to nearly 3x???
FYI, the IPO priced roughly 90 days ago at $27 per share and the stock closed today at $35.16. That’s at least a 30% increase for those who bought the IPO and probably a much greater increase for insiders.
If history tells us anything we’ll see increased volatility for awhile… If so, perhaps it will be a good opportunity for folks to fill out a position or to start a new position. I believe Datadog is a long term buy and hold for many so this event should eventually appear as just a little blip on the radar.