Do post-IPO 'insider' stock lockup periods still apply if you separate from the company
"There are quite a few regulations on ""Insider Trading"". Blackouts are one of the means companies adopt to comply with ""Insider Trading"" regulations, mandating employees to refrain from selling/buying during the notified period. Once you leave the employment: So unless there is an urgent need for you to sell/buy the options, wait for some time and then indulge in trade."
Normally, you don't pay capital gains tax until you actually realize a capital gain.  However, there are some exceptions. The exception that affected Eduardo Saverin is the expatriation tax, or exit tax.  If you leave a country and are no longer a tax resident, your former country taxes you on your unrealized capital gains from the period that you were a tax resident of that country.  There are several countries that have an expatriation tax, including the United States.  Saverin left the U.S. before the Facebook IPO. Saverin was perhaps already planning on leaving the U.S. (he is originally from Brazil and has investments in Asia), so leaving before the IPO limited the amount of capital gains tax he had to pay upon his exit.  (Source: Wall Street Journal: So How Much Did He Really Save?) Another situation that might be considered an exception and affects a lot of us is capital gain distributions inside a mutual fund.  When mutual fund managers sell investments inside the fund and realize gains, they have to distribute those gains among all the mutual fund investors.  This often takes the form of additional shares of the mutual fund that you are given, and you have to pay capital gains tax on these distributions.  As a result, you can invest in a mutual fund, leave your money there and not sell, but have to pay capital gains tax anyway.  In fact, you could owe capital gains tax on the distributions even if the value of your mutual fund investment has gone down. The top long-term capital gains tax rate will rise to 20% effective 1 Jan, 2011, unless Congress decides to do something about it before then. (Will they? Who knows!! There's been talk about it, but, well, it's Congress. They don't even know what they're going to do.)  Anyway. The rules about when you can sell stock are mostly concerned with when you can realize a capital loss: if you sell a stock at a loss and then re-buy it for tax purposes within 30 days, it's a wash sale and not eligible for a deduction. However, I don't believe this applies to any stocks once you realize a gain - once you've realized the gain and paid your tax for it, it's all yours, locked in at whatever rate. Your replacement stock will be subject to short-term capital gains for the next year afterwards, and you might need to be careful with identifying the holding period on different lots of your stock, but I don't believe there will be any particular trouble. Please do not rely entirely on my advice and consult also with your tax preparer or lawyer. :) And the IRS documentation: Special Addendum for Nov/Dec 2012! Spoiler alert! Congress did indeed act:   they extended the rates, but only temporarily, so now we're looking at   tax hikes starting in 2013 instead, only the new top rate++ will be something   like 23.8% on account of an extra 3.8% medicare tax on passive earnings (brought to you via Obamacare   legislation). But the year and the rates' specifics aside, same thing   still applies. And the Republican house and Democratic senate/President are still duking it out. Have fun. ++ 3.8% surtax applies to the lesser of (a) net investment income (b) income over $200,000 ($250k if married). 20% tax rate applies to people in the 15% income tax bracket for ordinary income or higher. Additional tax discounts for property held over 5 years may be available. Consult tax law and your favorite tax professional and prepare to be confused. Rather than take anyone's word for it (including and especially mine) you need to do think very carefully about your company; you know it far better than almost anyone else. Do you feel that the company values its employees? If it values you and your immediate colleagues then its likely that it not only values its other employees but also its customers which is a sign that it will do well. Does the company have a good relationship with its customers? Since you are a software engineer using a web stack I assume that it is either a web consultancy or has an e-commerce side to it so you will have some exposure to what the customers complain about, either in terms of bugs or UX difficulties. You probably even get bug reports that tell you what customer pain points are. Are customers' concerns valid, serious and damaging? If they are then you should think twice about taking up the offer, if not then you may well be fine. Also bear in mind how much profit is made on each item of product and how many you can possibly sell - you need to be able to sell items that have been produced. Those factors indicate how the future of the company looks currently, next you need to think about why the IPO is needed. IPOs and other share offerings are generally done to raise capital for the firm so is your company raising money to invest for the future or to cover losses and cashflow shortfalls? Are you being paid on time and without issues? Do you get all of the equipment and hiring positions that you want or is money always a limiting factor? As an insider you have a better chance to analyse these things than outsiders as they effect your day-to-day work. Remember that anything in the prospectus is just marketing spiel; expecting a 4.5 - 5.3% div yield is not the same as actually paying it or guaranteeing it. Do you think that they could afford to pay it? The company is trying to sell these shares for the maximum price they can get, don't fall for the hyped up sales pitch. If you feel that all of these factors are positive then you should buy as much as you can, hopefully far more than the minimum, as it seems like the company is a strong, growing concern. If you have any concerns from thinking about these factors then you probably shouldn't buy any (unless you are getting a discount but that's a different set of considerations) as your money would be better utilized elsewhere. how do they turn shares into cash that they can then use to grow their business? Once a Company issues an IPO or Follow-On Public Offer, the company gets the Money. Going over the list of question tagged IPO would help you with basics. Specifically the below questions; How does a company get money by going public in an IPO? Why would a company care about the price of its own shares in the stock market? Why would a stock opening price differ from the offering price?  From what I've read so far, it seems that pre-IPO an investment bank essentially buys the companies public shares, and that bank then sells them on the open market. Is the investment bank buying 100% of the newly issued public shares? And then depositing the cash equivalent into the companies bank account? Additionally, as the stock price rises and falls over the lifetime of the company how does that actually impact the companies bank balance? Quite a bit on above is incorrect. Please read the answers to the question tagged IPO. Once an IPO is over, the company does not gain anything directly from the change in shareprice. There is indirect gain / loss. Insiders (those who are aware of non-public material information, not necessarily employees) are the ones who actually cannot sell once they learned about whatever, by law. Martha Stewart went to jail for that. Any such deviation from the norm triggers abnormal response and avalanche of rumors, so by default investors assume something bad and try to minimize the loss. When dealing with a tiny company (market cap of less than 15M) with a tiny market volume (6.2M), the swings can be very significant. For such a small company, it is safe to assume that something happened that lead them to delay the conference call, and since they didn't tell what happen, investors assume the worst. It might end up as the CEO and CFO having bad stomach after celebrating 100% growth in revenue they were going to announce, but you'll have to wait and see.... Two more esoteric differences, related to the same cause... When you have an outstanding debit balance in a margin the broker may lend out your securities to short sellers.  (They may well be able to lend them out even if there's no debit balance -- check your account agreement and relevant regulations).   You'll never know this (there's no indication in your account of it) unless you ask, and maybe not even then. If the securities pay out dividends while lent out, you don't get the dividends (directly).  The dividends go to the person who bought them from the short-seller.  The short-seller has to pay the dividend amount to his broker who pays them to your broker who pays them to you.  If the dividends that were paid out by the security were qualified dividends (15% max rate) the qualified-ness goes to the person who bought the security from the short-seller.  What you received weren't dividends at all, but a payment-in-lieu of dividends and qualified dividend treatment isn't available for them.   Some (many?  all?) brokers will pay you a gross-up payment to compensate you for the extra tax you had to pay due to your qualified dividends on that security not actually being qualified. A similar thing happens if there's a shareholder vote.  If the stock was lent out on the record date to establish voting eligibility, the person eligible to vote is the person who bought them from the short-seller, not you.  So if for some reason you really want/need to vote in a shareholder vote, call your broker and ask them to journal the shares in question over to the cash side of your account before the record date for determining voting eligibility. Should I invest money in the pre-IPO stocks soon to be offered by the   company that I work for? Is it wise to do this? What should I be thinking about? What are the   risks? The last time I was offered pre-IPO friends and family stock, I purchased half of my allotment, and had my parents purchase the other half. Since I had a 6-month blackout period, I had to hold my portion. My parents sold their portion one day after the IPO. The price went up dramatically for about a day and a half, then dived continuously. My portion ended up being worthless. My parents made a few bucks. Good for them. Not a huge deal either way, since my cost was relatively low. If I had a chance to do it again, I'd give it all to friends or family instead of splitting it, and have them sell quickly if they realized a profit. You might be luckier than I was. "Yes, you could buy a stock on the day of its IPO. I'm a college student, and I wonder if I can buy stock from a company   right after it finishes its IPO? Yes, you can. However, unless you are friends or family of an employee, chances are you'll be paying a higher price than you think as there is generally a fair bit of hype on most  IPOs that allows some people to ""flip them"" which means someone is buying at a higher price. If I am not allowed to buy its stocks immediately after they go on   sell, how long do I have to wait? Generally I'd wait until the hype dies down as if you look at most historical IPOs the stock could be bought cheaper later but that's just my perspective. And also who are allowed to buy the stocks at the first minute they   are on sell? Anyone but keep in mind that while an IPO may be priced at $x, the initial trades may be a few times that value and the stock may come down over time. Facebook could be an example to consider of a company that had an IPO at one price and then came down for a little while on its chart over the past couple of years."