Subject: File No. S7-38-04
From: Jeffrey A. Schaffer
Affiliation: Spectrum Group Management LLC
January 18, 2005
To Whom it May Concern,
I have reviewed the the Proposed Rule change and am concerned that the flow of valuable information to institutional investors such as ourselves will be negatively effected due to the new proposed changes to the internet roadshow process. Today institutional investors are able to view the very same roadshow over the Internet as those who attend it 'live' -- the same slides and the same presentation. As with the 'live' roadshow we can not retain any of the information (copy or download). So in essence, both venues --'live' or via the Internet -- accomplish the same result: a presentation that is not a "writing."
I do believe that the SEC should provide issuers and underwriters with a better approach to provide an IPO Internet roadshow to the public at large. However, it seems to me that should be at the sole discretion of the issuer and underwriter as to the marketing approach they wish to take. If a company decides that it wants to raise its public profile, then it should be up to them (and their underwriter) if they wish to do a public Internet roadshow. It seems inconsistent that if a company elects to do a institutional roadshow that is an exact copy of the 'live' roadshow, that they must then follow with a 'bona fide' electronic roadshow for the public. Using the same logic, shouldn't there be at least one public showing of the 'live' institutional roadshow.
A secondary impact on a thinly staffed fund like ours is how the proposed rule change might effect secondary offerings. Often secondary offerings are very quick -- a matter of hours or a few days -- making it difficult to produce a Internet roadshow for both the institutional audience as well as the retail audience. Therefore, it seems that many companies may opt to only go with a 'live' version, which, because we would most likely not be able to attend, could curtail our access to important information.
Lastly, investors in public companies are already protected by both Reg FD as well as Sarbanes Oxley. Reg FD requires public companies to disseminate all material information to the public. Therefore, by law the offering company is not permitted to discuss any non-public information material in nature in it's secondary roadshow (unless, of course, it discloses it to the public at large). The SEC should recognize that the secondary roadshows are often comprised of information that shows a company's competitive advantages vs. it's competition. Needless to say, it is material that would place the company in a compromising position if it was exposed to its competition.
Thank you for your time and consideration.
Jeffrey A. Schaffer
Spectrum Group Management LLC
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