Biotech Lock-Up Expiration Hell Portfolio Message Board

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Biotech / Medical : Biotech Lock-Up Expiration Hell Portfolio

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To: keokalani'nui who wrote (268)	7/14/2001 11:02:19 AM
From: Biomaven	of 1005

Wilder, I tend to agree with you here. OTOH, a VC may not have any control over the actions of its limited partners. If the LP's knew the stock would be distributed to them, they could conceivably short ahead of the distribution and prior to lock-up release. Note that shorting would toll their holding period for Rule 144 purposes, but now that the period has been reduced to a year (for non-affiliates) that isn't likely to be a problem for them. BTW, I suspect that the people that do short ahead of lockup release are the market makers. They know they are going to get a bunch of stock dumped on them after the release, and they are allowed to go short as much as they like without borrowing stock. It might be interesting to look at the different patterns of stock behavior near lock-up release sorted by who the main underwriters were - conceivably we'd see some differing patterns. Incidentally a recent New Yorker had some neat investment definitions. They included: Limited Partner - that means you get the money last. General Partner - that means you get sued first. Peter

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