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.

  • Why do you think Ford would want to 'kill' Rivian [if this was true, why would they have taken a financial interest in the first place?]? How do you think they could actually do that [Rivian's stock price does not have direct, immediate impact on the company's finances, even if Ford's stake was large enough that liquidating would tank the price]? Your comment seems unrelated to the question at hand and might reduce the impact of answering it. Nov 12 at 17:32
  • I dunno, I'm guessing we'll get reprimanded if we argue about specific trades. So I probably shouldn't have mentioned that, but it would be pretty genius of Ford if they defended themselves from Rivian's emergence by investing in them. Cuz let's be honest, anyone making trucks is competing with Ford.
    – Ian
    Nov 12 at 17:42
  • That just doesn't make any sense. If they have any significant holdings in Rivian... then they want Rivian to Succeed. Rivian is not Ford's only rival, or anything close to it - if Rivian makes money, and Ford owns some of Rivian, then they make some of that money. Nov 12 at 17:54
  • On re-read of your comment, let me clarify - my questions are rhetorical, I see no basis in any way, in suggesting that Ford would want to / be able to tank Rivian by selling shares after buying at IPO - buying at IPO directly gave Rivian cash, and selling afterwards only indirectly impacts Rivian by reducing (only somewhat) the available investor pool - no impact to Rivian's operations after the IPO. This would be like getting mad at Nike so you buy their shoes and then burn them. Nov 12 at 18:00
  • I don't think the actual stock sale would hurt Rivian that much. But they can now raise about the same amount of money that Rivian did with their IPO by selling their shares to fund their own electric pickups/SUVs that will compete with the R1T and R1S.
    – Ian
    Nov 14 at 2:21

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.

  • Is it easy to look that stuff up, cuz it seriously affects trading strategies.
    – Ian
    Nov 12 at 17:45

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