Action Alert: IDACORP's Lock-Up Expiration and Forward Sales – A Volatility Play or Buying Opportunity?

The markets are always full of twists, but right now, IDACORP, Inc. (IDA) is sitting at a critical crossroads. With its lock-up expiration looming on July 8, 2025, and a complex web of forward sale agreements from May 2025, investors are bracing for potential volatility. Let's unpack this like the clockwork of a financial thriller—and figure out where the smart money should move.

The Lock-Up Expiration: A Floodgate of Liquidity

Lock-up agreements typically restrict major shareholders from selling stock for a set period after an offering. IDACORP's lock-up, tied to its May 2025 public offering, is now set to expire on July 8. While the exact terms aren't spelled out in the SEC filing, standard lock-ups last 90–180 days. Assuming a 90-day period, this expiration could unleash pent-up selling pressure.

But here's the twist: not all lock-ups are created equal. If insiders or underwriters hold large stakes, they might offload shares to lock in gains, temporarily depressing the stock. This could create a buying opportunity for those with a long-term view.

The Forward Sales: A Double-Edged Sword

The May 2025 forward sale agreements are the real wildcard. IDACORP sold 5.18 million shares through forward contracts, with settlement options extending to November 2026. Here's why this matters:
1. Dilution Risk: If settled physically, IDACORP will issue new shares, diluting EPS. But if settled via cash or net shares, the impact depends on the stock price relative to the $107.67 forward price.
2. Price Triggers: If the stock trades above $107.67 long-term, IDACORP could face cash outflows or share issuance. Below that, it might gain cash.
3. Acceleration Clauses: If borrowing costs spike or a major event (like a dividend hike or merger) occurs, settlements could be forced early, adding volatility.

Technicals and Timing: When to Pounce

The convergence of these events—lock-up expiration and forward sales—creates a “pressure point” for IDACORP's stock. Here's how to play it:
- Short-Term Volatility: Expect a surge in trading volume around July 8. A drop below $105 could signal a buying opportunity if fundamentals hold.
- Support Levels: The $100–$105 range has acted as support in recent months. A breach here might signal deeper weakness.
- Sentiment Shifts: Bulls will watch for a rebound above $115, which could rekindle momentum toward pre-offering highs.

The Bottom Line: A Strategic Move or a Trap?

IDACORP's situation isn't a simple sell-off. The forward sales and lock-up expiration are timing-dependent. Here's my call:
- For traders: Use the July 8 expiration as a catalyst. If the stock dips to $102–$105 on selling pressure, it's a risk/reward sweet spot.
- For investors: Look beyond the noise. IDACORP's core business—utility operations in the Pacific Northwest—is stable, and the forward sales' cash proceeds ($485M–$558M) could fund growth projects.

Final Word: Dive In—or Wait?

This isn't a “buy and forget” play. The next few weeks will test IDACORP's stock, but the setup could reward those who time it right. If you've got the stomach for volatility, the dip after July 8 might just be the entry point. But if you're risk-averse, wait until the dust settles—then reassess.

As they say on Mad Money: “The best opportunities are born in the chaos!” Stay sharp.

DISCLAIMER: This analysis is for informational purposes only. Consult your financial advisor before making investment decisions.