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Back in 2020 I had some stocks that used to be SPACs and watched their value plummet over a span of a few days as the initial investors were allowed to sell, because their initial required holding period had expired. I can't remember if the investors in question were those who invested before the SPAC, or the original funders of the SPAC itself.

Anyways, I have 2 questions regarding this:

  1. Is there a general rule for when this sell-off date comes for original investors in SPACs, or do you have to look it up somewhere (and where would this be looked up).
  2. Does this rule apply to companies that went public via standard IPO.

In this specific case I'm thinking about whether Ford has restrictions as to when it can sell its stake in Rivian (at which point I'm betting they will kill Rivian in the marketplace). I'm also wondering about this date for SPAC IVAN, which is taking SES public.

Ian
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The individual investor faces no restriction on selling publicly traded IPO shares. However, some brokers have a policy which reduces a broker's commission if his clients 'flip' shares immediately so if anything, that might hinder your ability to obtain future IPOs if dealing with a traditional broker.

For insiders, an IPO may have a lock-up provision which prevents them from selling shares for a period of time after the IPO debuts. It can be several months for traditional stocks and is often much longer for SPACs. These are company contracts rather than regulatory issues.

Bob Baerker
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