Roadshows are presentations by the management of an issuer conducting a public offering to market their securities.
Permissibility Under the Gun Jumping Rules
In an initial public offering (IPO), issuers market their securities through roadshows during the waiting period, i.e. after the issuer filed their registration statement but before the Securities and Exchange Commission (SEC) declares it effective. While Section 5 of the Securities Act limits gun jumping, i.e. offers to sell securities prior to having an effective registration statement, it allows issuers to make oral offers during the waiting period. Roadshows are considered oral offers for the purpose of Section 5.
Contents of Roadshows
In general, in roadshows the issuer’s management explains to potential investors the securities the issuer is offering and why the issuer is offering the securities. Management also may discuss the issuer’s business operations and give potential investors the opportunity to ask questions.
Roadshows may be conducted as a telephone presentation or as a face-to-face meeting with a group of potential investors. Since the Covid-19 pandemic, Morgan Stanley reports that most roadshows are held over virtual presentation platforms.
[Last updated in January of 2022 by the Wex Definitions Team]