The grueling, globe-trotting — “if it’s Tuesday this must be Zurich” — roadshow process has long been a big part of the IPO experience for management teams and their bankers. In the COVID-19 era, however, a PitchBook article says that virtual road shows may become the “new normal”:
Virtual IPO roadshows likely are here to stay after the pandemic, said Andreas Bernstorff, head of equity capital markets at BNP Paribas. BNP was one of the lead bankers for Peet’s €2.25 billion (around $2.55 billion) IPO on Euronext in May. Bernstorff acknowledged that sizing up a founder or its executives can be more difficult through video without making eye contact or reading body language.
Nevertheless, he said, virtual roadshows have exposed inefficiencies in the IPO process.
“The benefits are obviously avoiding traveling around the world, but also the fact that it can be a faster and more efficient way to reach more investors,” Bernstorff said. “It also has a very distinct benefit of being able, up to a degree, to shorten the period in which one needs to be in the market.”
The article says that fully virtual roadshows may not make sense for all issuers. Companies with a low profile and those that operate in volatile markets will likely continue to find it necessary to meet in person with key investors as part of the marketing process.
-John Jenkins, TheCorporateCounsel.net June 16, 2020
