Despite the fact that many pale in comparison to the success of Google's recent IPO, companies can still win coverage of their public offerings.
Like the class brain whose test score ruins the grading curve for everyone else, Google's much covered and successful initial public offering created a distorted view of the IPO market and the media's interest in it.
"IPOs aren't as glamorous as they were in the late 1990s," says David Splivalo, senior account manager at Silicon Valley firm Dovetail Public Relations. "So when there's a public-offering story, not everyone runs to cover it."
Part of this swing can be attributed to a fairly lackluster period on Wall Street; the average person on the street isn't paying nearly as much attention to his or her portfolio, let alone reading about the next public offering.
But Susan Butenhoff, president and CEO of Access Communications, also notes that the Sarbanes-Oxley Act has ushered in a new era of corporate accountability that has made companies far more cautious about what they say - and don't say - as they go public.
"Even the SEC will admit that it still has a lot of gray area, and what that gray area means is that people are erring on the side of being conservative," she says.
Change in media focus
Despite the increased caution, Eric Jones, director at A&R Partners, suggests that, for the right company, an IPO is still a newsworthy event. "Journalists always want to be the first in bringing information to readers, and the IPO is a very unique period in a company's history, where they really are at the beginning of something," he says.
Robert Angus, president of A&R, adds that the media have learned their lesson and are now concentrating on reporting, rather than cheerleading for, companies as they go public. "They're reporting the facts as opposed to hype," he says.
But one of the silver linings of the dot-com boom and bust is that they left the business press with a detailed understanding of the IPO process.
"We represent a privately held company that is planning on going out in the first quarter," says Stacey Gaswirth, EVP of PR at The Shelton Group. "And the first question Barron's asked them was, 'This is your F round, and are you considering it your mezzanine round, and what was the valuation of the round?' So they know the IPO market, and our role is really just educating the journalists on the company and their differentiators."
Navigating the quiet period
Part of what differentiates a business story about an IPO is the SEC regulations that mandate a quiet period from the time a company hires an underwriter until 25 days after the shares have begun selling. Those rules prohibit a company or its firms from participating in the pre-listing speculation on whether the stock is properly priced or will surge or sink on its public debut.
"Best practice dictates that once you're in the quiet period, you do tend to shy away from having a [senior] executive within the company giving interviews to the business press," says Jones. "You also must guard against a situation such as what happened with Google, where they granted an interview with Playboy before they went into the quiet period, and the story appeared shortly before their listing date."
Companies don't have to keep totally silent, though. "If a company has had regular communications over a 12-month period, for example two press releases a month, then it's viewed as business as usual because you have this history," notes Gaswirth.
"It forces companies to consider implementing a communications program much earlier than just a few months before they decide to go public," says Leanne Sievers, Shelton's EVP of IR.
Print and web-based reporters create most of the pre-IPO coverage. But Jones notes, "The actual listing day is a big moment for companies going public, and historically the SEC has allowed CEOs to appear before broadcast press as long as those interviews are strictly within the confines of quiet-period guidelines."
As soon as the quiet period ends, companies have traditionally sent their executives in front of the media to tout the new stock. But Butenhoff notes that firms are now rethinking that strategy, especially because many recent IPOs - again, with the notable exception of Google - quickly end up trading below their offering price.
"What's the point of sending your CEO and CFO on a road tour if the stock came out at $14 and is now trading at $7?" she asks. "So we're counseling our clients not to hook their media relations strategy around this post-IPO road show."