What does escrow mean?

Hi guys
What does this mean?
They will be releasing more shares to the market ?

Release of securities from escrow

In accordance with ASX Listing Rule 3.10A, Afterpay Limited advises that 1,440,213 ordinary shares in the Company subject to a voluntary escrow arrangement will be released from escrow on 18 January 2021.


Taken from Google:

Escrow is a financial arrangement in which two parties enlist a third party (who is neither the buyer nor the seller) to temporarily hold money, paperwork, or other assets for a transaction on their behalf before the transaction has been finalized.”

Lol yea I did Google it.
I don’t understand.

Sorry, that was harsh of me then.

You are selling shoes online that I want to buy, but I don’t know you and I don’t trust you so I ask for you to send the shoes first and I’ll pay later. You don’t know me and you don’t trust me so you want me to pay first and send the shoes later. It’s a Mexican stand-off.

So we use a third person who is not involved at all. He takes your shoes and waits for my money (or takes my money and waits for you shoes). When both are received, he releases the money to you and the shoes to me.


Got it. Does that mean extra shares will hit the market or be taken?

I’m not so familiar with the details but the below quote implies that 1,440,213 new shares will be released somewhere. I will assume to the public market.

Directors, early stage investors, and executives often have a large number of shares held in escrow as an incentive to stay with the company.

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Cheers that’s what I thought

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