The Transition To Online Roadshows

IPO roadshows go virtual in bid to circumvent Covid.


Airbnb, Vroom, ZoomInfo, Snowflake and Warner Music are some of the most successful IPOs of 2020—and they all have something in common: They didn’t need to embark on expensive cross-country roadshows to drum up investor support. Instead, these companies, their executives and their advisers did what schoolchildren, real estate agents and pretty much everyone did during the pandemic. They went virtual.

Interviewed by The Wall Street Journal, Warner Music CEO Steve Cooper described the company’s virtual roadshow as a very good alternative to the “mind-numbing travel day in and day out” of a traditional roadshow. It proved more beneficial by allowing the company—which went public in June and soared more than 20% on the first day of trading—to reach more investors in more places in a shorter period of time. 

Traditionally, a roadshow involves traveling to different cities to address possible concerns and highlight the virtues of a business to potential backers. The size of the listing helps determine the duration of the roadshow, which in some cases can last one to two months or more.

A successful roadshow can boost the price range of an IPO. Arguably, that is precisely what Airbnb managed to pull off without meeting its investors face-to-face: The price range for the IPO, initially set between $44 and $50 per share, increased to $68.

As an added bonus, the shorter time frame needed for a company to go public via a virtual roadshow can also reduce exposure to market volatility.

However, some experts caution against rushing to hail virtual roadshows as the new normal. Networking via Zoom can be extremely effective for certain more-established companies, but for many smaller startups, the risk is simply that no one will tune in.

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