An analysis of the number of outstanding shares of a company's stock that become freely tradeable at particular intervals following an IPO. To help maintain market confidence in the company, the company (issuer) usually agrees not to sell, contract to sell or otherwise dispose of any of its shares for a certain period of time after the offer without the underwriters' prior written consent. This is a lock-up agreement and includes any securities that are convertible into, or exchangeable for, the shares (subject to negotiated exceptions for grants to employees).

The lock-up period begins on the date the underwriting agreement is signed, and usually lasts for at least 180 days for an IPO. This period is extended if the company releases its earnings, or other material news, immediately before or after the original expiration of the period.

For more information on typical lock-up terms, see Practice Note, Underwriting Agreement Commentary.