Market Trends 2024/2025: Lock-Up Agreements

This market trends practice note provides an overview of current practices and evolving trends related to lock-up agreements in securities offerings, particularly in the context of IPOs and follow-on offerings. It outlines the typical structure and duration of lock-up periods, which generally remain at 180 days, though variations exist depending on the type of offering and market conditions. The document highlights the parties typically subject to lock-up agreements, such as issuers, directors, officers, and significant shareholders, and discusses the standard and exceptional carve-outs that may be negotiated. It also explores the role of underwriters in enforcing or releasing lock-up provisions and the regulatory requirements surrounding such releases. Recent developments include a return to traditional lock-up structures following a brief period of more flexible arrangements during the IPO boom of 2020–2021. These included performance-based releases, staggered release schedules, and abbreviated terms for nonexecutive employees. The document notes that while such innovations are now less common, they may reemerge as market conditions improve and issuers gain more negotiating power. Overall, the document reflects a comprehensive snapshot of the lock-up agreement landscape as of mid-2025.

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