when a company launches an initial public offering ipo or a first time issue of its stock to the general public there may be lock in stipulations on shares held by founders promoters and other early backers of the company this is to prohibit these people as company insiders from selling or transferring shares during the ipo period when they might have advantageous company information that outside investors don t 
this period might last 90 days or even several years after the ipo a lock in period mitigates the possibility of such manipulation by restricting insider trades executives and senior management might also be compensated with locked in shares that are not released for a period of time after they are initially granted in order to encourage superior performance 