Tip For Researching an IPO Investment
Initial Public Offerings (IPOs) are first opportunities to buy a company's stock as it goes onto the public market. Executives of companies pending IPO often do 'roadshows' -- marketing presentations to strut their stuff and explain why their stock is worth buying at the IPO. Until recently, these presentations could only be accessed by investment bankers and their wealthy clients, but new SEC regulations that went into effect Dec. 1 have opened them up to the average investor.
A small investor will likely view a different pre-scripted presentation by management, not a taped recording of a live show attended by investors like Fidelity Investments. Small investors also aren't guaranteed access to a segment of the roadshows that large investors consider essential: the question-and-answer sessions, when attendees can quiz executives about the offering and watch the ease in which they reply.