The Pitch: Managers’ Disclosure Choice During IPO Roadshows

We examine firm disclosure during the initial public offering (IPO) roadshow presentation relative to the registration filing to examine the informativeness of a management presentation designed to attract investors. These two disclosure events are the primary information sources during the IPO, but the IPO roadshow is shorter, typically allowing managers more autonomy to select what information is released and how it is discussed. We find that IPO roadshows have significantly more positive, less negative, and less uncertain language than the SEC filing. Using machine learning to classify roadshow topics into one of five major topics in the registration statement, we find that roadshows differ in both the topics selected and the language used within each topic. We then compare the predictive ability of the roadshow and filing language, and we find that roadshow language predicts future accounting performance but filing language does not. These results highlight the informational role of management presentations.