There’s an article on SA today about SEDG (http://seekingalpha.com/article/3509676-ipo-lockup-expiratio…).
The gist of it is that the IPO lockup period ends in a few days and a bunch of investors with large holdings in SEDG are likely to take profits. The suggestion is sell now and buy back after the big investors sell large volume trades and drive the price down.
I usually ignore these short term ploys, but this one kinda makes sense. I just don’t have any experience with this kind of thing, so I’m not too sure if it is really an opportunity or if it’s meaningless. Does anyone have better knowledge about this than I?
The lockup expires on 9/22. I noticed SEDG was off about 2% today (maybe due to the SA article). The IPO price was around $18, so the stock is up about $9/share since then.
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Can you either way. Look at any recent IPO and the lockup dates (SHAK, GPRO, BABA, etc).
Lockup expiry isn’t a basis for a trade, it’s really more of a coinflip on how the market will react to the extra shares being AVAILABLE to be sold. Nothing says people have to sell them, and any initial investors with a positive outlook will likely still hold a big chunk anyway.
Also, sometimes these sales are orchestrated in large block trades that are negotiated outside the regular market trading so it’s often not like its just some guy hitting “sell 10,000,000 shares with a market order” and crashing the price.
These people likely know the company better than anyone except insiders. They will likely take some profits at some point now that it is liquid, but why would they sell all if they still believe it will keep growing
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I remember a few years ago there was a lot of consternation as the expiration of the Facebook lockup approached. But as I recall, shares rose 5% when the first lockup expired – probably because everyone was braced for armageddon.
But here’s the more important point: back before the lockup expiration, FB was trading around $19-$20. Today it’s trading above $93. Even if there was some extra volatility around those lockup dates, it certainly didn’t end up mattering.
Nobody knows what will happen with the SEDG lockup expires. The stock could go up, it could go down, it could go sideways. It’s not like it isn’t normally pretty volatile anyway 
But it’s all just going to be noise in the long run.
Neil
Long SEDG
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I agree with both Mike and Neil. The end of the lockup period is a big deal to the financial media, but it is irrelevant when it comes to making an individual investing decision.
I think it depends on how narrow the IPO was and how likely the insiders are to sell.
For GoPro, their IPO put almost no shares on the market, so shares surged (low supply and good demand). And then the end of the lockup put way more shares on the market because of the surge.
So you should look at how tight the IPO was as compared to how many shares insiders are allowed to sell after the expiration of the lockup period. Also, take a look at the long term thoughts on a company. Don’t just look at quarters surrounding an IPO – very often companies time the IPO to be surrounding what they anticipate to be unusually good quarters.