Earlier this week, the post-IPO lock-up period expired for insiders holding 234 million Facebook shares.
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After the lock-up period, the principal payment would be passed on to ABS investors.
They transfer the stock just after the public offering or the lock-up period, if there is one.
All selling holders, as well as officers and directors, have agreed to a 90-day lock-up period following the offering.
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There is usually a lock-up period for credit card receivable ABS during which no principal will be paid.
The lock-up period for those shares ended two weeks ago, coinciding with a 13% slide in the company's share price.
Facebook (NASDAQ:FB) has been one of the strongest stocks in the market over the past three weeks following the expiration of an 800 million share IPO lock-up period.
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Groupon also said that it has extended the post-IPO lock-up period from May 2 to June 1, which pushes the period past a planned earnings announcement on May 14.
At the same time, the lock-up period expired on 234 million shares of Facebook stock Monday and 777 million more shares expire on Nov. 14, as Eric Savitz notes.
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If the principal is paid within the lock-up period, new loans will be added to the ABS with the principal payment that makes the pool of credit card receivables unchanged.
Maybe the boom will last another 3 years and new deals financed today will be able to go public and the investors will get to cash out after the IPO lock-up period ends.
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The listing could occur before June, so HSBC will have to act now if it does not want to be trapped by a lock-up period, typically imposed on existing shareholders for periods of up to a year.
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