An Initial Public Offering or IPO is the process of selling new or existing securities to the public for the first time. The process of “going public” consists of many steps, culminating in the pricing and after-market stabilization by the underwriters. While every step in the process is imperative, the ability of management to “sell” a company to institutional investors is essential.
Once the SEC Form S-1 has been flipped from confidential to public, there is a mandatory 15-day waiting period before a company can begin its marketing roadshow. During this time, companies typically finalize their corporate messaging and slide decks and prepare for their investor meetings. At the beginning of the IPO roadshow schedule, the lead underwriting bank will generally have the company present to its institutional equity salesforce, at which time, the presentation will be recorded by the lead underwriting bank and uploaded to a U.S. Securities & Exchange Commission (SEC)-compliant online solution, like NetRoadshow. These services provide potential IPO investors, who may or may not be able to attend a live presentation, an opportunity to watch the recorded presentation from any internet connected device. Having the IPO roadshow professionally recorded and edited, compared to having it recorded by the underwriters, may make a difference between a good IPO and a great IPO.
Below are some of the top factors to consider when thinking about prerecording an IPO Roadshow:
- Practice makes perfect. A strong, polished corporate presentation can be one of the deciding factors for institutional investors thinking about investing in a new company. A company that prerecords its IPO roadshow has the opportunity to practice and even view its presentation before presenting live to investors. This advantage can be invaluable, as management has a chance to observe the presentation and make any adjustments it deems necessary.
- Multiple tries. Just like movies and television, prerecording an IPO roadshow allows for multiple retakes. If a word is flubbed or a sentence does not sound quite right, the speaker can record another version of that sentence, and it can be edited during post-production.
- Professional editing. Unlike an IPO roadshow recorded during the underwriting sales teach-in, prerecorded IPO roadshows are professionally edited and enhanced, potentially making the presentation look and sound better.
- Cost. As with any service, there is always an associated expense. On average, a 30-minute IPO roadshow can cost between $15,000 and $20,000 for taping and editing. The actual cost could be higher depending on the amount of time it takes for post-production.
- Timing. Timing is typically the reason many companies decide to forego prerecording their IPO roadshows. A video production company will want at least seven days to record and edit a customized video, forcing the company to record its IPO roadshow within a few days of flipping its S-1 to public. While many companies will have their roadshow decks nearly finalized by this time, prerecording an IPO roadshow will preclude any possibility of making final changes to a presentation.
Conclusion: Having a professionally recorded and edited IPO roadshow available on the internet for potential IPO investors to view can be a deciding factor in whether they choose to invest or not. On the surface, the decision to prerecord an IPO roadshow seems like a “no-brainer,” but in reality, the choice is much more difficult. The combination of extra time needed and the inability to change any portion of a corporate slide deck, post-recording, could make prerecording an IPO roadshow a non-starter. To further assess the pros and cons of professionally taping your IPO roadshow, contact us.
Greg Chodaczek, Managing Director