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Which roadshow is better: Twitter or Antiques?

A sign is posted outside of the Twitter headquarters on October 25, 2013 in San Francisco, California. Twitter announced that it has set a price range for its initial public offering between $17 and $20 per share and hopes to sell 70 million shares. 

Lark Mason is an appraiser on PBS's Antiques Roadshow, and he's a lot like a skeptical investor.  I asked him about this seven-year-old social media company -- it has a really cute sky-blue bird on it -- how much does he think it might be worth?

Well, he says, there are a lot of ways to figure out value, so he's going to have to ask me some questions. Like, what kind of condition it's in...

It hasn't made a profit yet, I say.

Hmm, he says. That's kind of a challenge.

But it has 230 million users, up 39 percent between 2012 and 2013, and it's expected to keep growing, I perk up.

He likes that a bit better. There's a good reason to say it's got a pretty strong valuation for the moment, he says, but as to long term viability, it's hard to say.

The actual road show is a lot like that back and forth. Investors go to meet the company and try to determine the core of the value of a business.  Kathy Smith is one of those investors.  She's a principal at Renaissance Capital, a firm that specializes in IPO investments, and she's been going to roadshows for 20 years.

She says investors at roadshows have lots of questions. "Clarifying questions, competitive questions, the strategy, where the company sees its strongest business opportunity."

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The roadshow hasn't changed much over the years. Chris Low is chief economist at FTN Financial, says it's still an invite only event with big investors that usually takes place in a conference room in some hotel.  It's certainly not the kiind of sexy event you might expect from all the headlines about IPOs. He describes the scene at the last roadshow that he attended.

"A bunch of brokers sitting around tables playing with their iPhones paying no attention to a group of wonky looking guys delivering a powerpoint in a monotone. That's the road show," says Low. 

But, he says, a curious thing has happened in terms of the companies that are selling shares to the public these days.

"Some of these tech companies -- just by being on the Internet -- the company is well known and has a presence long before it reaches profitability."

He says with these kinds of IPO's, companies are having to prove they're worth before they even turn a profit.  Which means they better have quite  an impressive power point presentation.

About the author

Sabri Ben-Achour is a reporter for Marketplace, based in the New York City bureau. He covers Wall Street, finance, and anything New York and money related.

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