General Motors and Skype are just two of the major companies that filed an IPO in 2010 and, as the market returns to a sense of normalcy after a fallow period, communications around IPOs is being increasingly scrutinized.
On July 16, software company QlikTech went public, celebrating listing day with NASDAQ, and working with PR AOR MS&LGroup before and during the IPO process.
Douglas Laird, global marketing VP, and Maria Scurry, executive director of global PR, both joined QlikTech about a year prior to the IPO. They "cranked up the focus on PR, because we both knew its power and leverage," Laird says.
With specific quiet periods - between filing the S-1, the initial registration form for new securities that kicks off the process with the SEC, and listing day, and then for 40 days after listing day - along with the SEC's looming presence, many companies prefer to stay quiet during the process. But agencies that work on IPOs tout well-planned communications as a key to success.
Tom Rozycki, SVP at CJP Communications, suggests a PR firm be brought in 24 to 36 months prior to a company's IPO.
"Leading up to the public offering, you want people to see there is a continuous stream of both news and business you're conducting because then you're a legitimate entity," he says.
John Dillard, SVP at Weber Shandwick, agrees. "Private companies that establish a strong PR infrastructure and a track record of proactive communications are well-served if they later decide to pursue an IPO," he says.Value of experience
With vast financial communications and corporate issues management experience, Dillard adds, "It's important to have people to supplement your in-house team who've 'been there, done that.'"
PR was key for Rosetta Stone, which conducted what many saw as a successful April 2009 IPO. The Wall Street Journal reported that the stock began trading at $18 a share, but by close of its first day it jumped to $25.12.
"In everything we did, we were aware of what we were saying," says PR director Reilly Brennan, noting that the company worked with GolinHarris and its legal counsel to make sure it stuck to its message points.
He adds that many consumers knew of Rosetta Stone, but not the story behind it. Though the company maneuvered through quiet periods, the IPO "was a great spotlight for us," notes Brennan.
Dawn Dover, senior partner at Kekst and Company, agrees: "Very often, the whole process of going public forces the company to really refine its story, tell it from a financial perspective, and just generally communicate more."
QlikTech and MS&L had an all-hands meeting in January, filed the S-1 in April, and then celebrated listing day in July. PR should be involved, as the S-1 also dictates what the company can tell Wall Street and investors during its road show.SEC compliance
The SEC, Rozycki says, allows companies to continue in a normal course of business throughout the IPO, which means communications about product launches and other normal news is acceptable. If a company is already active in social media, such as QlikTech, the same rules apply. But efforts that would be seen as promoting the company overall or enhancing the stock's value are a no-no.
Listing day, at which point financial and business communications can increase, gave QlikTech and MS&L a chance to do media relations, reach out to Europe before the opening bell, target US financial media, and work around the day's news, including Apple's iPhone 4 press conference.
"We had to leverage relationships and think outside the norm," says Seth Eisen, SVP at MS&L, who leads the QlikTech account. The team got CEO Lars Björk an interview with CNBC Europe for the closing bell.
Dover says the company is working with MS&L to further build up financial communications, whose "role in all of this is to help management map out details of a communications plan, launch the company effectively on listing day, and establish best-in-class financial communications and IR policies and procedures for after the process is over."IPO press coverage
As the IPO market heats up in 2010, these outlets have begun broadcasting live from the New York Stock Exchange:
Xinhua News Agency
CNBC India TV 18