roadshow
Roadshow means the tour a company's bosses go on to meet big investors and sell them on buying shares before the company lists on the stock exchange.
In plain English
Adaeze works in investor relations for a Lagos company preparing to list on the Nigerian Exchange, and for two weeks in September her calendar had no white space left in it.
Lagos on Monday, Abuja on Tuesday, then a flight to London on Wednesday for meetings with fund managers who control money that could buy up a good chunk of the shares on offer.
That whole circuit is the roadshow. Before a company sells shares to the public for the first time, or raises fresh money through a share sale, its chief executive and finance chief travel from city to city meeting pension funds, asset managers and wealthy investors, pitching the story behind the numbers.
It is not a party. It is a sales trip with slides, hard questions about profit margins and competitors, and polite smiles that hide serious scrutiny on both sides.
The point of the roadshow is to build demand before the shares even hit the market, so that on listing day there are enough buyers lined up that the price does not fall flat.
Someone in London reading about a Nigerian bank's roadshow before its share sale is watching the same dance that happens on Wall Street, just with a different accent and a different set of risks being explained.
A Lagos based fintech planning to raise ₦20,000,000,000 through a share sale sends its executives on a roadshow to Lagos, Abuja, London and Dubai, meeting institutional investors before the shares are priced and offered to the public.
Questions people ask
Can ordinary retail investors attend a roadshow?
Usually not directly. Roadshows are mostly aimed at institutional investors like pension funds and asset managers who can buy large amounts of shares, though the same information often appears later in the public prospectus that anyone can read.
Does a roadshow guarantee the share sale will succeed?
No. It improves the odds by building early interest and letting the company answer tough questions in advance, but if the wider market turns nervous or the price is set too high, the sale can still struggle.
Is a roadshow the same as an IPO?
No. An IPO is the actual event of a company selling shares to the public for the first time. The roadshow is one step in the process, the marketing tour that happens before the shares are priced and sold.
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