The Pitch : Managers’ Disclosure Choice During IPO Roadshows

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