What is Price Talk?
Price talk refers to discussions about the price of a pending initial public offering (IPO) or upcoming bond issue.
How Does Price Talk Work?
Price talk is usually debate and discussion about what a fair price is for certain new securities. During the process, the issuer's investment bank often 'sets' the price talk, meaning that it essentially strongly suggests a price range for the issue. Other interested parties participate in the discussions as well.
Why Does Price Talk Matter?
Price talk can be very insightful because the participants often compare the issue price to benchmarks, similar issues and previous offerings. The discussions help investors make informed decisions about what the price of the issue should be.