If anyone knows of a broker who will let you withdraw the proceeds (cash) of a short sale, I will buy the name of the broker off you. I'll also let you know why I would pay for this (although you may already know anyway, hah).

I spent a week researching this talking to fidelity, schwab, IBKR, and Robinhood, none would allow it.

I asked an adjacent question to a broker friend who flatly replied: "Not interested in being served a Wells Notice."

Which more or less answered the question for me, even if he was being a bit hyperbolic.

Why would anyone let you do that? What's their incentive? I assume you're offering something as security for that money (shares?) but why would people complicate an already risky proposition further or go into the money lending business that they're not in?

That’s almost always prohibited.

Given the current administration’s recent market behavior I would not be shocked if people got away with exactly what OP described.

It's often prohibited by contract, not just law, so what the administration thinks is only part of the story.

Of course whether or not a contract is or is not enforceable as such is also a matter of law. As I understand, this IPO was unique for a variety of reasons. The fact unique terms are promulgated in a contract does not mean (at least in saner times) that they are automatically immune to regulatory scrutiny.

You don't "short the stock" by taking a loan secured by it.

Insiders aren't allowed to short a stock. It's against the law.

Against corporate policy, it's against the law only if they trade on material non public information.

Once the lockup expire they'll be able to trade (sometimes there's trading window but some tech company don't have any for lower level employees), and they'll still be insiders.

What happens if you get margin called in this scenario?

That would be a crime.