ALVR - Why AlloVir Stock Dropped Today
2023-09-21 14:44:37 ET
Shares of AlloVir (NASDAQ: ALVR) fell as much as 7% early Thursday, then largely recovered to trade down around 0.7% as of 1:40 p.m. ET amid concerns over a lock-up agreement expiration for certain restricted stock units of the late clinical-stage cell therapy company.
Lock-up agreements are a common way to prevent insiders from quickly cashing out their shares or stock options in a company after it goes public or issues new shares. These agreements typically designate certain tranches of shares or stock options to become eligible for sale by insiders after periods of between 90 and 180 days following an offering.
AlloVir, for its part, held its initial public offering (IPO) back in 2020, so its initial lock-up periods related to going public have long since passed. But more recently, the company priced the issuance of 20 million new shares of common stock at $3.75 per share on June 21, and had certain stock options owned by directors, executive officers, and "certain of significant shareholders" that were consequently under a lock-up agreement for a period of 91 days. That period ended yesterday, Sept. 20, spurring concerns of potential selling pressure if those insiders were to promptly part ways with their shares or options.
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Why AlloVir Stock Dropped Today