How to Sell Stock After the IPO

Consider keeping your shares if the company is doing well.

An IPO, or initial public offering, allows the public to purchase shares in a company in order for the company to raise money to get out of debt or to build equity. Private companies typically use an IPO when they begin to go public. Before the IPO, the only people who own stock in the company are typically investors, board members, executives and employees. Public companies have already offered at least a portion of the company to public shareholders, who own stock in a company. When a company launches an IPO, people who owned stock in the company before the public offering can consider selling their shares.

Instructions

1. Speak to the company's CFO or a finance executive about your current shares. The CFO or financial executive should be able to tell you what you have and the value of your stock in the company.

2. Determine when you are able to sell your shares. In some cases, you cannot sell your shares immediately following an IPO. This depends on the Securities and Exchange Commission (SEC) and your company's policy on individual shares. This delay is typically called a "holdout period" or "lockout period."

3. Discuss the options you have to sell the stock with your company's financial manager. Do you need to go through a specific broker or firm? If so, contact that broker to sell your stock. Obtain your certificate for the amount of shares you own.

4. Bring your stock certificate to your bank and ask for the investment officer. Ask the investment officer to sell the stock at the current price. The value of the stock will be returned to you, usually within three days.

Tips & Warnings

• If possible, wait at least a few days, or possibly longer, to sell your shares after the holdout or lockout period ends. Many employees sell their shares immediately following the lockout period, which decreases the value of the shares. If you wait until the share price rebounds, you might make more money.

References

• Investor Guide: Initial Public Offerings
• Articlesbase: How To Sell Common Stock Shares

Resources

• Kiplinger: When to Sell a Stock