The Roadshow

The Roadshow is a presentation organized by an issuer of securities and the syndicate of brokers and investment banks underwriting an issue of securities, aiming at presenting to investors an opportunity of investment.

It usually takes place in an hotel, a convention center, a bank or a prestigious place under various circumstances such as a Private Offering of equity or debt securities, an Initial Public Offering (IPO), a Secondary Public Offering or a Non Deal Presentation.

The management of a company issuing securities or doing an Initial Public Offering (IPO) travels internationally, appears on a screen through a webcast to give presentations to analysts, fund managers, potential investors and their financial advisors.

The road show is intended to generate excitement and interest in the issue or IPO, and is often critical to the success of the offering.

The road show moves across many locations that are scheduled in advance and completed over a specific time period. Roadshows may be sometimes be limited to one country but usually include several international stops.

Within the United States, some common destinations include New York City, Chicago, Los Angeles, Miami and Denver.

Roadshow Events

Roadshow events may attract hundreds of prospective buyers interested in learning more about the offering.

The events may include multimedia presentations and question-and-answer sessions with several of the company’s officers present.

Many companies take advantage of the internet and post versions of road show presentations online. In addition to the larger road show events, companies may also hold smaller, private meetings in the months and weeks preceding the offering.

Information Presented in a Roadshow

Roadshows cover a variety of topics including the company’s history and any future plans for growth. Information about the company’s current assets, whether tangible or intangible, can be presented, as well as a sales pitch regarding the upcoming offering.

Aside from providing information regarding the offering, the roadshow allows the company the opportunity to answer questions that may be posed by skeptics in the marketplace or during due diligence meetings.

It provides a forum where the company can communicate directly with potential stakeholders to address any potential concerns.

The underwriters also use information gathered from investors to complete the book-building process, which involves gathering prices potential investors are willing to pay for the offering.

After the Completion of the Roadshow

Once a road show is completed, the final prospectus is created and distributed to potential investors.

This prospectus is also filed with the U.S. Securities and Exchange Commission (SEC).

An initial price for the offering is set based on the information gathered during the book-building process, and the IPO date is solidified.

Non Deal Roadshow

A non deal roadshow occurs when executives hold discussions with current and potential investors but nothing is offered for sale. A roadshow provides an introduction of the offering to potential investors and was considered a key non financial factor in buying decisions made by 82% of institutional investors in regards to IPOs in a 2014 study by Ernst & Young.