According to ChatGpt:Existing holders, such as venture...

According to ChatGpt:

Existing holders, such as venture capitalists, private equity firms, or early investors, may push the share price down before a Nasdaq IPO for several reasons:

1. Lock-Up Period Considerations:

After an IPO, there's often a lock-up period during which insiders (like early investors, company founders, and employees) cannot sell their shares. Some holders might push the price down to "adjust" or "rebase" it before the lock-up period ends, hoping to sell at a more favorable price after the lock-up period expires.

2. Market Timing and Exit Strategy:

If the market conditions are not favorable or if these holders have a specific exit strategy in mind, they may prefer to sell before the IPO at a higher valuation. In some cases, they may be using tactics to create downward pressure, potentially triggering lower valuations or creating favorable conditions for their exit.

3. Price Discovery:

As the IPO approaches, there can be increased volatility in the market due to speculation and investor behavior. Existing shareholders might sell off some of their holdings or exercise their options in an effort to lock in gains, which could lead to a temporary decrease in share price. In some cases, they may also be managing their own portfolios or liabilities.

4. Short-Term vs Long-Term Goals:

Early investors who have already made a significant return on their investment might push for a price decline to take profits before the IPO, especially if they see risks in the market or the company’s future prospects.

5. Market Psychology:

In some cases, existing holders might sell to create a sense of urgency or market panic, driving the share price lower. This could make the stock more attractive to institutional buyers or retail investors, potentially increasing demand before the IPO.

In general, market movements before an IPO can be complex, with both strategic motivations and short-term market dynamics at play.

Not advice, DYOR