How long must a restricted stock be held before it can be sold under Rule 144?

Under Rule 144, restricted stock must be held for a minimum of six months before it can be sold. This holding period is designed to help ensure that the stock has some level of marketability and to protect against the immediate resale of unregistered securities, which could undermine the integrity of the public markets.

Once the six-month holding period is satisfied, certain conditions must still be met for the sale of restricted securities, such as the availability of current public information about the issuer and limitations on the volume of stock that can be sold. This regulatory framework serves to facilitate the transition of restricted stock into the public market while maintaining investor protections.

By fulfilling this holding requirement, the seller is signaling that they have a legitimate stake in the company's equity and are not simply trying to liquidate their investment immediately, which balances the interests of both the seller and the investing public.