Investing

Insider Action: Expiring Quiet Periods, Lockups, and IPOs for Week of 8/6

When company insiders buy or sell stock in their own companies, the transactions may or may not offer a hint about a company’s prospect. Legendary investment manager Peter Lynch once remarked that insiders sell shares for any number of reasons, but they only buy more stock for one reason: they think the price will go up.

There wasn’t a lot of insider buying last week, but there was one transaction worth noting. Salesforce.com chairman and CEO Marc Benioff exercised an option to acquire 20,000 shares at a price of $59.34 per share. The transaction occurred on July 23 and the company’s stock closed that day at $248.25.

In the coming week, seven companies are expected to price initial public offerings (IPOs) and another two are listed as day-to-day. Here’s the full list (the last two are day-to-day). The market cap is based on expected pricing at the midpoint of the IPO price range.

Company Ticker Price Range Deal Size Market cap
Better Being Co. (BBCO) $15.00 – $17.00 $200 million $843.4 million
Cadre Holdings (CDRE) $16.00 – $19.00 $125 million $606 million
European Wax Center (EWCZ) $15.00 – $18.00 $175 million $1.05 billion
Orange County Bancorp (OBT) $32.00 – $35.00 $30 million $30.2 million
WCG Clinical (WCGC) $14.00 – $16.00 $720 million $6.1 billion
Weber (WEBR) $15.00 – $17.00 $750 million $5.6 billion
Healthcare Royalty (HCRX) $15.00 – $17.00 $750 million $3.45 billion
Context Therapeutics (CNTX) $12.00 – $14.00 $20 million $19.5 million
ROX Financial (ROXA) $10.00 $83 million $89.5 million

After a company submits its first filing for an IPO, company executives typically embark on a “roadshow,” meeting with big investors and brokerages to tout the virtues of both their company and the stock. Once the stock begins trading, however, the company and its staff enter what’s known as a quiet period during which they may not talk about the company or its stock. The quiet period lasts 40 days.

Special-purpose acquisition companies, aka SPACs or blank-check companies, that combine with a start-up to come public in a reverse merger play by different rules. The U.S. Securities and Exchange Commission (SEC) treats these deals as mergers, not IPOs, and often there is no quiet period at all.

Most investment banks that underwrite IPOs do not issue research, including projections, on the company for a period of 25 days. This is done by custom more than by regulation, but the SEC and the courts appear to be satisfied with the length of the underwriters’ quiet period. When these reports are finally made public, they usually reinforce all the reasons the underwriter chose to participate in the IPO in the first place.

A similar restriction applies to company employees (insiders) who may be prohibited from selling any shares they may own for a period of time, generally between 90 and 180 days. For SPACs, the lockup period typically lasts between 180 days and a full year. A lockup period is not mandated by SEC rules, but are set by the company in its IPO registration and is intended to keep insiders from flooding the market with shares and, in so doing, eroding the share price.

For the week ending August 6, nine companies will see their 25-day underwriter research quiet period end and another nine will see the insider lockup periods expire.

Here are the nine companies with lockup expirations coming this week.

Company Ticker Industry
Sana Biotechnology (SANA) Biopharma
Evaxion Biotech A/S (EVAX) Biopharma
Terns Pharmaceuticals (TERN) Biopharma
Immunocore Holdings (IMCR) Biopharma
Bolt Biotherapeutics (BOLT) Biopharma
Lucira Health (LHDX) Medical Devices
Pharvaris B.V. (PHVS) Biopharma
Vor Biopharma (VOR) Biopharma
Angion Biomedia (ANGN) Biopharma

Here are the nine companies for which the underwriter’s quiet period expires this week.

Company Ticker Industry
Moving iMage Technologies (MITQ) Electronics
TransCode Therapeutics (RNAZ) Biopharma
NLS Pharmaceuticals (NLSP) Biopharma
ON24 (ONTF) Enterprise IT
TELUS International (TIXT) Enterprise IT
Landos Biopharma (LABP) Biopharma
Sensei Biotherapeutics (SNSE) Biopharma
Atotech Limited (ATC) Manufacturing
Sentage Holdings (SNTG) Fintech