PR: Your Partner for a Successful IPO, Pt. 1
By Cara Sloman, Executive Vice President
191 companies went public in 2018, raising a combined $46.8 billion. That’s up from $35.5 billion raised for 160 IPOs the previous year. A well-executed IPO can be a demanding, even grueling, process that requires a tremendous amount of messaging and coordination. Since a company only has one chance to make a good first impression, public relations plays an vital role in building the market buzz that is essential to IPO success.
From conducting press briefings on the floor of the NASDAQ to a having a client go public on both U.S. and German stock exchanges within the span of 24 hours, our participation in 18 IPOs across eight international exchanges has given us a deep appreciation for the way proper foresight and coordination can prepare a company for the rigors of operating in a regulated environment.
In the first half of this IPO blog series, we’ll outline how to build essential pre-IPO buzz. Read the full Forbes article here.
Building Momentum Before the Quiet Period
In the U.S., one of the first official steps in an IPO is filing an S-1 form to register a company’s securities with the SEC. This filing begins the company’s “quiet period,” which extends to 25 days after the initial trading date. This quiet period is an SEC-mandated embargo on promotional publicity. This prohibits management teams or their marketing agents from making forecasts or expressing any opinions about the value of their company.
In those precious months before the beginning of the quiet period, an IPO-savvy PR team will work to execute well-planned campaigns to positively impact market perceptions about the company. Pre-IPO preparation, done right, can help to ensure that good news resonates among the company’s key audiences, creating the right degree of market buzz. An important key to success is developing concise and consistent messaging that clearly communicates the company’s business and aggressively raises awareness.
Success in the Quiet Period
It’s a common misperception that no PR activity can take place during the quiet period. But public relations can play an important role, even during the quiet period. During this time, no information outside of a company’s S-1 document can be publicly disclosed by senior management, the underwriting or legal teams, or the communications specialists. Moreover, the issue of disclosure governs all public relations activity during the quiet period, including active promotion of the company to journalists, forward-looking statements made by senior management and related activities.
These constraints might seem challenging. But, by establishing a prior track record of regular news announcements, media coverage and awareness of the company through industry trade shows and other public events, a smart PR firm can open the door for continuing communication during the quiet period to position clients for success.
Even if some aspects of the company must remain “quiet,” the PR team can maintain activity to ensure messaging gets out to all the company’s key audiences. During the quiet period, a savvy agency can also work to coordinate with the public exchange’s media specialists to properly generate SEC-approved public awareness of a stock’s first trading day.
A Strong Exit from the Quiet Period
Lastly, the PR team must ensure that the company exits the quiet period with forward momentum. After the 25-day post-IPO quiet period ends, new issues of disclosure emerge surrounding “material news” in external communications. Close coordination between senior management, the investor and public relations specialists will ensure that a company’s messages resonate among its key investment and non-investment audiences.
We encourage our clients to start planning and executing a well-coordinated PR effort no less than a year in advance of an IPO, and then continue to build on the momentum generated by this program well after the quiet period is over. Learn more about how we can help lay down a solid foundation for your IPO.
In part two, learn about three effective tools we commonly use throughout the IPO process to maximize success.