How to avoid the PR pitfalls of floating on the stock exchange

PR professionals need to anticipate the negative press that can come with a tech IPO, warns Hazel Butters.

London Stock Exchange: Paternoster Square
London Stock Exchange: Paternoster Square

In some ways, seeing a company through an initial public offering (IPO) is like being a parent. We help tech start-ups to form their first words, develop a profile and establish a personality.

During a short period, the company goes through rapid changes. Tech PROs accustomed to running the entire comms programme must now form close partnerships with the company's advisers.

Information disclosure procedures might require PROs to sit on stories they would normally rush to market. This is crucial at a time when they are helping to build confidence and interest among potential investors and other stakeholders.

With the tools in place to assess and monitor media coverage, and the experience to spot changes in pace or tone, PROs play a critical role in advising the company.

But floating isn't without its pitfalls. The stock market is quick to judge: if the company is overconfident in its PR, it risks disappointing shareholders when stock prices don't match the hype. If directors benefit personally from the IPO, the press can be damning.

It is the job of the PRO to anticipate and manage any bad press, whether in the tech trade magazines or the Financial Times.

PROs should expect fraught communications with the client company too: if weddings are among the most stressful experiences for families, then IPOs are certainly the equivalent for tech firms.

The client is under regulatory and financial pressures on top of its own changes. PROs need to reassure clients that the PR aspects are taken care of - including legal responsibilities.

After the flotation, there is a greater need that ever to achieve positive coverage. As well as media and customers, businesses are now addressing the market and investors. Tech PROs will need to become aware of the financial calendar and deal with finance and city reporters as well as analysts.

Public companies require a financial PR agency, so agencies and PROs may need to liaise with corporate comms teams. Clients will need strategic advice about their PR obligations now that they must report to the market.

Despite all the stress and red tape, working on a flotation is one of the most satisfying jobs in tech PR. When the IPO is complete, your agency will be able to trace its involvement in the evolution of a firm from start-up to listed company.

Hazel Butters is the CEO of Prompt Communications.

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