Investing

Insider Action: Expiring Quiet Periods, Lockups, and IPOs for Week of 8/9

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 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. Sun Communities chairman and CEO Gary Shiffman acquired 234,934 shares at a price per share of $194.20. The transaction occurred on July 28 and the stock closed Friday at $196.26.

In the coming week, four companies are expected to price initial public offerings (IPOs). Two are listed as day-to-day. Eliem Therapeutics and Healthcare Royalty are listed as day-to-day while Finwise Bancorp and Southern States Bancshares are expected to begin trading Thursday.

After a company files for an initial public offering (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 is 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 13, 17 companies will see their 25-day underwriter research quiet period end and another 13 will see the insider lockup periods expire.

Here are the 17 companies with lockup expirations coming this week.

Company Ticker Industry
Baosheng Media Group (BAOS) Digital Media
Cloopen Group (RAAS) Enterprise IT
Adagene (ADAG) Biopharma
Global Internet of People (SDH) Internet
Viant Technology (DSP) Digital Media
Vallon Pharmaceuticals (VLON) Biopharma
Biophytis (BPTS) Biopharma
Bumble (BMBL) Internet
Apria (APR) Healthcare Services
Bioventus (BVS) Biopharma
Signify Health (SGFY) Healthcare IT
LoanDepot (LDI) Financial Services
Decibel Therapeutics (DBTX) Biopharma
Talis Biomedical (TLIS) Healthcare IT
NexImmune (NEXI) Biopharma
urban-gro (UGRO) Agriculture
Longeveron (LGVN) Biopharma

Here are the 13 companies for which the underwriter’s quiet period expires this week.

Company Ticker Industry
Inspira Technologies (IINN) Medical Devices
Rapid Micro Biosystems (RPID) Healthcare Services
Phillips Edison & Company (PECO) REIT
Sight Sciences (SGHT) Medical Devices
F45 Training (FXLV) Consumer
Sera Prognostics (SERA) Healthcare IT
Imago BioSciences (IMGO) Biopharma
Regencell Bioscience (RGC) Biopharma
Stevanato Group S.p.A. (STVN) Healthcare Products
Bridge Investment Group (BRDG) Real Estate
Blend Labs (BLND) Fintech
TScan Therapeutics (TCRX) Biopharma
Erasca (ERAS) Biopharma