ESTC-25% Lockup Expires Tomorrow

Pursuant to the lock-up agreements executed in connection with the Company’s initial public offering, provided the closing price of Elastic’s ordinary shares on March 4, 2019 is at least 33% greater than the IPO price of Elastic’s ordinary shares, 25% of the shares subject to the lock-up agreements will be released from lock-up, and such shares will become eligible for immediate sale in the public market, at the open of trading on March 6, 2019

Penny for your thoughts.

Darth

4 Likes

This shows lockup expiration as 4/3…?

https://www.nasdaq.com/markets/ipos/company/elastic-nv-10250…

Bear

1 Like

I think a partial lockup expiry tomorrow and the remaining share become unlocked on 4/3/2019.

Rob

2 Likes

In latest earnings report.

https://ir.elastic.co/Cache/1500117805.PDF?O=PDF&T=&…

Whole statement. 25% tomorrow, remainder close of market April 2. So both. IPO was $36 so pretty sure they met the 33% requirement yesterday.

Lock-Up Release Date and Extension
Pursuant to the lock-up agreements executed in connection with the Company’s initial public offering, provided the closing price of Elastic’s ordinary shares on March 4, 2019 is at least 33% greater than the IPO price of Elastic’s ordinary shares, 25% of the shares subject to the lock-up agreements will be released from lock-up, and such shares will become eligible for immediate sale in the public market, at the open of trading on March 6, 2019, subject to trading limitations on shares held by affiliates of Elastic and applicable securities laws, restrictions under Elastic’s insider trading policy and continued vesting of any unvested equity awards as of such date.

The lock-up restrictions with respect to all remaining shares are scheduled to expire after the close of the market on April 2, 2019. However, since the Company will be in its standard quarterly trading blackout period on that date, insiders will be restricted from selling shares until the start of the third trading day following the end of this blackout period. The Company expects to announce its earnings results for its fiscal year ending April 30, 2019 in early June 2019.

3 Likes

Hey Bear,

This bit was included in their earnings release last week:

Pursuant to the lock-up agreements executed in connection with the Company’s initial public offering, provided the closing price of Elastic’s ordinary shares on March 4, 2019 is at least 33% greater than the IPO price of Elastic’s ordinary shares, 25% of the shares subject to the lock-up agreements will be released from lock-up, and such shares will become eligible for immediate sale in the public market, at the open of trading on March 6, 2019, subject to trading limitations on shares held by affiliates of Elastic and applicable securities laws, restrictions under Elastic’s insider trading policy and continued vesting of any unvested equity awards as of such date.
The lock-up restrictions with respect to all remaining shares are scheduled to expire after the close of the market on April 2, 2019. However, since the Company will be in its standard quarterly trading blackout period on that date, insiders will be restricted from selling shares until the start of the third trading day following the end of this blackout period. The Company expects to announce its earnings results for its fiscal year ending April 30, 2019 in early June 2019.

1 Like

I’ll be watching for volatility, buying on dips according to my level of conviction (higher than my current portfolio percentage).

Re: “I’ll be watching for volatility, buying on dips according to my level of conviction (higher than my current portfolio percentage).

I’m hoping to buy during a dip too, but you never know we may have to wait to April 5th for our opportunity (hopefully some of the institutional investors and insiders sell after each lockup).

There seems to be support at $75 so I wouldn’t expect it to dip much further than that. In fact, those who brought the company public will probably do their best to support higher prices.

The stock priced at $36 during the IPO so early retail investors have over 2x in just six month (much of that came the first day). If they see a pullback starting they may trim a little. Insiders and Institutional investors have much bigger gains so they are the most likely to trim. After years of building up the company some will find it nice to finally buy a new car, boat or home. I suspect that most insiders won’t sell the first day hence if we’re going to see a dip it may happen over weeks or even months as supply and demand economics take over for a bit. Beyond that we should be back to the races. Of course, some stocks don’t pullback after their lockup expiration, time will tell…
https://www.investors.com/news/technology/elastic-ipo-initia…

3 Likes

https://seekingalpha.com/news/3440065-elastic-gets-outperfor…

Oppenheimer starts ESTC with $110 PT

Steve

1 Like

It’s nice to see Oppenheimer giving them upgrade. There were a number of book runners who will be doing their best to hold up the price over the next several days, but Oppenheimer wasn’t listed as one of them.

Looking back at the IPO - “Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are acting as joint lead book-running managers for the offering. Barclays Capital Inc. and RBC Capital Markets, LLC are acting as book-running managers for the offering. BofA Merrill Lynch, Citigroup Global Markets Inc., and Jefferies LLC are also acting as book-running managers for the offering. Canaccord Genuity LLC is acting as co-manager for the offering.
https://www.elastic.co/about/press/elastic-announces-pricing…

It’s interesting to see anyone upgrading the day before a lockup expiration as there will be tens of millions of shares that will become trade-able over the next month. That shouldn’t effect the long term, but it makes one wonder about the timing of the upgrade. I suppose that Oppenheimer just wants their clients to get in at the best price possible and now may be the right time to get that '-)

Take care,

VR_Robear

2 Likes

There were a number of book runners who will be doing their best to hold up the price over the next several days

Robear, why would the underwriter of the listing care about the current market price seeing as the IPO was fully subscribed. What’s in it for them?

fireblade909, that is something that I had heard once and I thought that it had something to do with shares that the underwriter were given the right to buy, but it is possible that they only use stabilizing bids during the offering week/month and that I’m wrong about the lockup expiration.
https://www.investopedia.com/terms/s/stabilizingbid.asp

This morning, I tried to read up a little more on lock up expiration events and the following weeks. Most articles seem to confirm that the month after a lock up expiration can be a buying opportunity for savvy investors.

The following is long and dry but could be a good read for anyone wishing to know a lot more about lock up expiration events. I would recommend opening two browser windows so you can read using one and view the associated tables/charts in a second.
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.466…

The following is much shorter and takes a look at Okta just before its lockup expiration. Note that Okta barely budged after its lockup expiration event.
https://seekingalpha.com/article/4108976-lockup-expiry-seaso…

By the way, it appears Okta barely budged after its lockup expiration.

Take care,

VR_Robear
Who bought a starter position in ESTC today and will be looking to add more over the next 45 days.

1 Like

Robear, why would the underwriter of the listing care about the current market price seeing as the IPO was fully subscribed. What’s in it for them?

An underwriter may not directly lose money if the subsequent price drops but the investors they sold to would and thus the u/w does not want anyone to associate them with what could be considered a poorly priced deal.

1 Like