Zscaler Could Come Under Pressure When Lockup Expires

The 180-day lockup period for Zscaler (ZS) ends on September 24, 2018. When this period concludes, the company’s pre-IPO shareholders have the opportunity to sell large blocks of currently restricted shares. The potential for a sudden increase in the volume of shares traded on the secondary market could negatively impact the stock price of ZS.

(Source: S-1/A)

ZS had a first-day return of 106.3% and now trades in the $39 to $41 range. ZS has a return from IPO of 175.4%.

Note

While the 180-day IPO lockup expiration for ZS was scheduled for September 12, 2018, this date is usually delayed when the company reports earnings within close proximity to the IPO lockup expiration. ZS reported Q1 results on September 5th.

In our seven-year study of IPO lockup expirations, we have found this period of delay to be 17 calendar days from the date of earnings, making the adjusted lockup expiration for ZS 9/24/18.

Business Overview: Provider of Cloud Security Services

Zscaler is a cloud security service provider that operates worldwide. The company offers a SaaS-based security platform that provides secure access for users across an array of devices and applications. Zscaler provides its services to multiple industries including technology, public sector, and education, media and communication, healthcare, manufacturing, consumer goods and retail, financial services, telecommunications, transportation, and others.