Roadshow
A Roadshow is an offering presentation by one or more members of issuer management that discusses the issuer, its management or the securities being offered to prospective investors.
How it works
Rule 433 defines Roadshow for Securities Act purposes. Roadshows are commonly used during the Waiting Period to present management, strategy, financial information and offering terms to institutional investors. A Roadshow can be live, oral, electronic or a written communication depending on its format. A written Roadshow is generally a Free Writing Prospectus, although Rule 433 provides special filing treatment and a bona fide electronic-roadshow exception for specified nonreporting issuer equity offerings.
Management participation is part of the definition
The Rule 433 concept centers on a presentation by members of issuer management.
The Roadshow is an offer
It is an offering communication rather than ordinary corporate disclosure.
Written Roadshows can be Free Writing Prospectuses
Rule 433 provides filing rules and exceptions for Roadshows that are written communications.
A bona fide electronic Roadshow can affect filing obligations
For specified nonreporting issuer common-equity or convertible-equity offerings, unrestricted public access to one bona fide electronic version can avoid filing every written Roadshow version.
Worked example: IPO video presentation
A nonreporting IPO issuer makes one complete electronic management presentation publicly accessible without restriction while using other written Roadshow versions with institutions. Rule 433 determines the filing treatment.
Why Roadshows influence pricing
Investor questions and indications of interest help underwriters assess demand and build the order book before final pricing.
Common mistakes
Calling every investor deck a Roadshow; assuming Roadshows are outside offering liability; ignoring Free Writing Prospectus rules for written versions; and treating Roadshow demand as binding investor orders.
Example
An IPO management team conducts investor meetings in several cities and through video sessions while the Registration Statement is on file. Management presents the company’s business and answers investor questions before pricing.
Example
An IPO management team conducts investor meetings in several cities and through video sessions while the Registration Statement is on file. Management presents the company’s business and answers investor questions before pricing.
Professional note
Not every investor presentation is legally a Roadshow. Rule 433’s definition requires an offering presentation involving issuer management and discussion of the issuer, management or offered securities.
Related terms
- Free Writing Prospectus
A Free Writing Prospectus is a written offering communication used in connection with a registered securities offering that qualifies under Securities Act rules governing permissible free writing prospectuses.
- Preliminary Prospectus
A Preliminary Prospectus is a prospectus used before a Securities Act registration statement becomes effective that contains substantially the required offering disclosure but can omit specified pricing-dependent information.
- Waiting Period
The Waiting Period is the stage of a registered securities offering after the Registration Statement has been filed but before it has become effective.
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