The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Early releases devalue lock-ups

Investment bankers predict a healthy flow of equity capital markets business this year as stock markets continue the run-up that began last spring. If the secondary markets' tone remains strong, investors may be tempted to buy new issues. But they should remain suspicious over whose interests the investment banks are serving: theirs as investors, or those of issuers' of stock who grant mandates and fees to the banks.

Lock-up agreements didn't appear to mean much this January as Goldman Sachs and Merrill Lynch, and then JPMorgan waived constraints preventing large shareholders in Yell and Telekom Austria from selling more stock before an agreed period had elapsed following initial disposals.

Lock-ups are typically agreed with the original vendor of a stock – perhaps a government in the midst of a series of privatizations, a private equity group which may regularly wish to exit positions to return cash to its investors, or a corporation pursuing a restructuring programme – when it first floats a portion of its holding in a company on the public market but still retains a large chunk of shares.

Sometimes vendors hold these blocks because they want to retain the chance to participate in the share's anticipated upside.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree