The Pitch: Managers’ Disclosure Choice During IPO Roadshows

57 Pages Posted: 25 Mar 2020 Last revised: 28 May 2021

See all articles by Elizabeth Blankespoor

Elizabeth Blankespoor

University of Washington - Michael G. Foster School of Business

Bradley E. Hendricks

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Gregory S. Miller

University of Michigan, Stephen M. Ross School of Business

Date Written: May 1, 2021

Abstract

We examine firm disclosure choice during the initial public offering (IPO) roadshow presentation to examine the informativeness of a management presentation designed to attract investors. While firms must submit a comprehensive registration filing during the IPO, investors convey strong interest in the IPO roadshow, which is shorter and typically allows 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 from the registration statement, we find that roadshows differ in both the topics selected and the language used within each topic. We then examine the predictive ability of the roadshow language, and we find that roadshow language predicts future accounting performance while filing language does not. These results highlight the informational role of management presentations.

Keywords: Voluntary Disclosure; IPO; Roadshow; Managerial Presentations; Textual Analysis; S-1 Filings

JEL Classification: M41; G10; M12

Suggested Citation

Blankespoor, Elizabeth and Hendricks, Bradley E. and Miller, Gregory S., The Pitch: Managers’ Disclosure Choice During IPO Roadshows (May 1, 2021). Available at SSRN: https://ssrn.com/abstract=3545716 or http://dx.doi.org/10.2139/ssrn.3545716

Elizabeth Blankespoor

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States

Bradley E. Hendricks (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States
(919) 962-3619 (Phone)

Gregory S. Miller

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

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