Why Twitter shouldn’t have kicked out Buzzfeed

Oct 31, 2013

Dan Primack was a senior editor at Fortune from 2010 to 2016. He was also the author of Term Sheet, Fortune's daily newsletter about deals and dealmakers.

FORTUNE -- Earlier today a reporter from Buzzfeed attempted to crash Twitter's IPO roadshow presentation at New York's Mandarin Oriental hotel. And then a woman yelled at the reporter to get lost, which was followed by some more gentle persuasion by hotel security.

It made for a fun little story, and a bunch of snarky tweets about the menu (for the record, chicken and iced tea). But all of that masks a somewhat larger point: Media should have been allowed to attend.

Before continuing, I recognize that this sounds self-serving. Particularly given that Twitter's (twtr) roadshow rolls into my town tomorrow. But this is a broader argument that I first made in September 2011, in a column about why the "IPO quiet period" should be scrapped. From that piece:

Companies going public typically produce an electronic road show, in which the CEO and other company executives make a presentation about the company and then take questions from prospective investors. It is available to the public online until the stock begins trading. In these sessions CEOs are instructed to keep referring to the IPO prospectus and not speak too much off the cuff.

What follows are private meetings with the money managers. Transcripts are rarely kept, and some sources say that [boastful] comments would not be unusual. Neither would an answer to a question that the CEO declined to address during the electronic road show. Even if CEOs stick to the script, hedge fund managers can watch body language and other nonverbal cues that the public never sees.

In other words, company executives are not supposed to disclose anything that prospective investors could not have otherwise learned from public filings and the electronic road show (here is Twitter's). But everyone knows that additional information often is imparted, thus providing roadshow attendees with the very advantage that the law is designed to prevent.

To be clear, I'm not accusing Twitter or any other company of surreptitiously breaking the rules. I'm accusing them all of participating in business-as-usual, which is de facto breaking the rules.

My solution: Let reporters attend the roadshow meetings.

If a company isn't saying anything it shouldn't be, then what exactly is the harm? The benefit would be twofold: (1) Ensure that such shadiness is not occurring, and (b) Expanding the reach of the company's message, including to investors who weren't lucky enough (or in the right city) to get a chicken and tea invite.

If you don't want to let reporters ask questions, fine. Just like most companies prevent them from doing so during quarterly earnings calls. But you'd never see a publicly-traded company prevent reporters from listening to such calls. You know, because it's publicly-traded. Since that's the same intent here, it seems that banning media is a needlessly secretive vestige of a company that isn't entirely prepared to enter the public realm.

So let us in. Not because it helps us out. But because it's the right thing to do by your future investors. All of them, not just the chosen few.

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