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When the 25 million shares are released from the 180 day lock up, the float will increase to about 45 million, correct? Does this jump in float typically drive down the price for a period?
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Please forgive me for being green, but what is a 180 day lock-up. Does this mean that exactly 45 million shares of this stock will be released 180 days from ALGN`s IPO? Trade ya for a walleye fishin` question.
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As I understand it (in rough numbers):
There are 45 million shares outstanding.
This includes the 10 million from the IPO.
According to the prospectus, the investors prior to the IPO hold 35 million. Of that, these investors have agreed not to trade 25 million until 180 days from the IPO. So the current float is about 20M shares. The investors average cost of these shares is about $4/share, I think. Once the 180 expires, there will be an increase in Supply (the extra 25M shares) and the average daily trading volume has been steadily decreasing to about 200,000. I would think that some of the 25M would be ready to cash in but who's going to buy?
Law of Supply and Demand would seems to drive the price down.
Is it typical for other IPO's to have this 'lock up' and is there history of big price drops after it expires?
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