The lead manager will sponsor a teach-in to educate its sales force about an upcoming IPO, during which time the issuer's management will make a presentation and answer questions. This event normally occurs at the launch of the roadshow.
IPOs had originally been restricted from soliciting demand, or "testing the waters," for the deal before it officially launched. However, the 2012 JOBS Act allowed emerging growth companies to get feedback from qualified institutional buyers (QIBs), and in 2019 the SEC expanded that rule to include all issuers. Under Regulation A+, an issuer can test the waters with any potential investor, even soliciting interest online or advertising the offering on TV. Being able to test the waters lets companies have a better sense of what valuation they can fetch in public markets, or if they can get an IPO done at all. On the other hand, it also gives institutions one more leg-up over ordinary investors.
When an IPO is completed, the underwriting group advertises their involvement by publishing a list of underwriters in the financial press. The underwriters are listed in descending order of importance. The lead manager's name appears on the upper most left.
When a parent company wants to recognize the underlying value of one of its businesses, it can either spin off a portion of the shares of the company to the public, thus establishing a value for the business, or it can issue tracking stock. Unlike the shares of a spin-off, which have claim to the assets and profits of the spun-off company, a tracking share has no such claim. As the term states, the shares are meant to "track" the performance of that particular business. A parent company may choose to issue tracking stock because it wants to retain full voting control over the business or because the assets of the division cannot be easily separated from the parent. Tracking stock is also called letter stock.
A French word used to describe segments of the IPO being sold in different countries. A multi-tranche distribution is commonly used for large U.S. and foreign IPOs where there is demand both in the U.S. and in their home country.