Why should you pay attention to expiring lockup periods? Good question.

For some of you this will be the first time you've heard the term lockup, for others it'll be old hat. Let me give a quick explanation so that we're all up to speed, then we can move on to examine how such an event is viewed by investors:

Lockup period: For a preset number of days following an IPO, certain classes of shareholders are restricted from selling their shares. This "lockup period" is designed to protect a newly issued stock from undue selling pressure from insiders. At the end of the lockup period, these restricted shareholders may sell some or all of their shares.

Now, most people I talk to, or whose stuff I read, take the position that an expiring lockup is a guaranteed net-negative for a stock. They jump to the quick and almost universal conclusion that the resulting increase in the float will damage the stock price and make for an obvious short. I disagree: An increase in a newly issued stock's float can actually be a good thing. How? Consider the following.

Most institutional investors -- mutual funds, pensions, etc. -- have clearly established investment criteria that define the characteristics of securities that they may buy. A common qualifying feature for allowing investment in a particular stock is its liquidity. One of the measures of a stock's liquidity is, you guessed it, the size of the float.

One fund manager I talk with complains that she is held back from participating in many of the super-hot IPOs because of her fund's investment criteria, specifically the restriction prohibiting her from owning stocks with floats of fewer than 5 million shares. Obviously not all institutions are prevented from buying small-float IPOs. Some of these simply wait for the lockups to expire and for shareholders to sell enough stock to qualify that issue for investment.

The most important thing to consider when using expiring lockups as the basis for putting on a trade, whether long or short, is that every stock is different. Some will weaken or even collapse as a result of the event, while others will flourish. Quite frequently, a stock will dip a few days in advance of the lockup expiration, but then quickly recover and rise even higher than before. In effect, this reflects a combination of these twin influences on the stock.

The following is a list of stocks whose lockup periods are expiring in the early days of March. It is intended to flag upcoming volatility in recent IPOs, not to be a recommendation for or against any particular stock. Each week we'll repeat this list as a way of staying ahead of this important issue.

We welcome your questions and

comments.

Ben Holmes is the founder of

ipoPros.com , a Boulder, Colo.-based research boutique (now a wholly owned subsidiary of TheStreet.com) specializing in the analysis of equity syndicate offerings. This column is not meant as investment advice; it is instead meant to provide insight into the methods of new and secondary offerings. Neither Holmes nor his firm has entered indications of interest in any of the companies discussed in this column. Holmes' This Week in IPOs column appears Sundays, This Week's Secondaries appears Tuesdays, Upcoming Lockup Expirations appears Wednesdays and The Quiet Period appears on Fridays. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Holmes appreciates your feedback at

bholmes@thestreet.com.