How does news about a company spread during the pre-ipo quiet period?

November 20, 2011 7:20 PM

How do people get information about a company during its pre-ipo quiet period?

A friend owns some very early (friends & family) shares in a biotech startup. The company has subsequently been quite successful and filed its S-1 in July. Since then there have been a couple of amendments to the S-1 but no other news.

This company isn't a Groupon or Zynga or other famous high-flier. Searching Google News yields basically nothing. Is there any way to find out anything about what's happening? It's not clear when or even whether the IPO will actually happen. My friend called the shareholder relations person at the company and was told that because of the quiet period they couldn't tell him anything: no timeline, nothing.

But somehow, news about pre-ipo companies does get out. Is there some formal process for educating potential investors that happens during the quiet period but is completely hidden from the public? Is there any way to find out what is happening?

I'm curious because I think of myself as an educated investor, but when my friend asked me about this I came up blank. Searching for "quiet period" doesn't yield much help.

posted by alms to Work & Money (4 answers total)

There is typically a roadshow before an IPO, but after the S1 has been filed. This is where management, their bankers, and prospective institutional investors come together. It's not so much where "news" is relayed, but there is a fair amount of that going on. The bankers and company use it to determine how much demand there is, and what a good pricing would be. (for example, after a dismal road show Groupon actually delayed there IPO for a couple months). The investors get some facetime with management.


Maybe something like this helps?
posted by H. Roark at 7:40 PM on November 20, 2011

So if there's been zero news items does that mean the roadshow hasn't happened yet? Or is the roadshow an entirely private affair?
posted by alms at 7:54 PM on November 20, 2011

roadshow is private, but they can't say anything material that isn't in the S-1. Just read the S-1
posted by JPD at 8:24 PM on November 20, 2011

The S-1 doesn't say whether the IPO is still on track or when it will be. That's what I want to know.
posted by alms at 6:55 PM on November 29, 2011