Page 118 - Initial Public Offering - An Introduction to IPO on Wall Street

reached a consensus on the price for the offering and the goal of the IPO. The deadline of the
IPO must have been agreed upon as well.

The Securities and Exchange Commission (SEC) is responsible for the final version of the
prospectus. All prospective investors have the right to access the IPO's final prospectus, which
is circulated by the firm.

Non-Deal Roadshow

A roadshow does not necessarily
imply that securities are offered
to prospective investors by a firm.
It is considered a non-deal
roadshow (NDR) if an
organization conducts a
roadshow without selling equity
or debt securities to prospective
investors.

An NDR helps to generate public
awareness about a business and
provides information on the
business's success and financial
performance. Generally, an NDR
provides prospective investors
with updates about a business;
plans and aspirations of the company are also disclosed.

IPO Roadshows in Summary

The following is a summary of the most critical information related to IPO roadshows to
remember:

 A roadshow involves a series of sales pitched related to an IPO made to prospective
investors in various places and at various times;
 A roadshow helps an underwriting company to make an IPO sales presentation;
 The IPO roadshow also offers a chance for potential investors to interact with the upper
management or the business that is about to go public;
 Multimedia presentations on the business's history, aspirations, and plans, financial results,
IPO targets, among others, are included in the roadshow activities;
 An organization can conduct a roadshow without selling equity or debt securities to
prospective investors; this is referred to as a non-deal roadshow (NDR); and
 IPO roadshows can be held physically or online

5.2.4 Step 4: IPO Pricing
The effective date is determined after the IPO has been approved by the SEC. The bid price
(i.e. the rate at which the securities will be offered by the issuing organization) and the total
volume of shares to be sold are determined by the issuing organization and the underwriter a
day before the IPO becomes effective.

It is necessary to determine the bid price because it is the price at which the issuing firm
generates capital for itself. Influencing the offering price are the following factors:

Page 118