Insights

Lock-Up Expiration Evidence

Alphanume Team · March 16, 2026

What returns around unlocks actually look like.

The empirical record on lock-up expirations is among the more thoroughly documented event-driven anomalies. Multiple studies — academic and practitioner — across multiple decades show a consistent pattern of negative abnormal returns in the windows surrounding lock-up expiration dates. The magnitude varies by lock-up type and issuer characteristics; the direction is robust.

The headline findings

From the combined literature on lock-up expirations:

IPO 180-day lock-ups: Mean abnormal return in (-5, +5) window typically -1% to -3%. Drift continues for 30-60 days beyond expiration.
De-SPAC sponsor lock-ups (typically 12 months): Mean abnormal return in (-5, +5) window typically -3% to -7%. Magnitude tends to scale with size of locked-up holding relative to float.
De-SPAC target-insider lock-ups (typically 6 months): Mean abnormal return -2% to -5% in the immediate window.
PIPE resale registration effectiveness: Often -3% to -8% in the first 10 days of tradeability.

Conditioning improves the signal

Several variables sharpen the conditional response:

1. Lock-up size as % of float. Larger unlocks produce steeper drift. The relationship is roughly monotonic across the 50%-500%-of-float range.

2. Holder mix. Sponsor-heavy unlocks produce steeper drift than founder-heavy unlocks. Event-driven-PIPE-heavy unlocks produce the steepest drift of all.

3. Pre-expiration price action. Stocks that have rallied into the lock-up expiration give back more of the rally. Stocks that have declined into expiration sometimes show counter-trend bounces.

4. Early-release trigger proximity. Names approaching but not yet hitting early-release triggers show different dynamics than names with early-release distantly in the future or already triggered.

5. Borrow conditions. Names with constrained borrow exhibit more pre-event front-running and consequently smaller post-event drift (more is priced in pre-event).

What does not work as well

Short-window-only positioning. Entering on the day of expiration and exiting within a week misses most of the drift. The window over which the effect compounds is typically 20-60 days.
Treating all unlocks equivalently. Without conditioning on size and holder mix, the average effect is weaker.
Ignoring confounding events. Earnings, strategic announcements, or M&A in the event window contaminate the signal.

Cohort-level analysis

Recent practitioner analyses of the 2020-2023 de-SPAC cohort consistently find:

Aggregate underperformance of -15% to -30% in the 12 months following sponsor lock-up expiration.
Higher dispersion than IPO cohort — most names fall, but some rally substantially on operational news during the same window.
Concentration of the strongest drift in high-redemption-rate, small-float, deteriorating-fundamental subsets.

The methodological caveats

Several considerations:

Survivorship. Many de-SPAC names delist between merger and lock-up expiration. Studies that drop them at delisting understate the cohort underperformance.
Sample period. The 2020-2021 vintage was particularly extreme. Generalizing to other vintages requires care.
Definition of "abnormal." Choice of benchmark affects results. Matched-firm benchmarks typically show stronger effects than market-model benchmarks for these small-cap, post-merger names.

Distinguishing pre- and post-event effects

Returns around lock-up expirations decompose into two components:

Pre-event drift: Front-running by short-sellers and hedgers anticipating supply.
Post-event drift: Realized distribution by unlocked holders.

The pre-event component typically begins 30-60 days before expiration. The post-event component typically extends 30-90 days beyond expiration. Strategies that capture both dimensions outperform strategies focused only on either.

Trading implications

The evidence supports:

Positioning 20-40 days before scheduled expirations in qualifying names.
Holding through expiration plus 30-60 days.
Concentrating on the highest-conviction subsegment (de-SPAC sponsor expirations in deteriorating-fundamental names).
Excluding squeeze-risk-heavy candidates from concentrated positioning.

The signal works at the population level; individual-name conviction is limited by the volatility of small-cap post-merger names.