Optimal IPO Lockup Structure

CaaS proposes a staggered Initial Public Offering (IPO) lockup expiry provision that distributes the unlock date and quantity of shares offered throughout time. The traditional 180-day single lockup expiry is well known and tracked by short sellers in the market, which is evident by the increase in short interest approaching lockup expiry. Volume and volatility are also high during a single unlock date structure. To avoid these shortcomings, we encourage future IPOs to adopt a more staggered unlock schedule which would gradually add supply as newly listed stocks are introduced to the public market.