You’ve IPO’d… Now what?
1 June 2017
By Rana Abdel Fattah
Going public is far easier than actually being public. In a report published by Ernst & Young (EY) companies that go public face three main challenges: working with a larger and more diverse group of investors; delivering on promises; and maintaining the pace of growth post-IPO. What’s even more challenging is the ability for a company to maintain and build upon the goodwill that they nurtured during their IPO.
Nevertheless, there’s no stopping the rate at which companies are going public. This is especially evident in Europe. PwC notes that in Q1 2017 alone, 53 European IPOs raised €4.5bn, an increase by 28% when compared to Q1 2016 when 50 IPOs raised €3.5bn.
The US market has also been witnessing a rise in IPOs. PwC further outlines, in a January 2017 report, that there was an overall strong performance of US tech IPOs, as well as a rise in investor interest. “The first quarter of 2017 was one of the strongest for the US IPO market, establishing a solid runway for more deals for the remainder of the year. This positive performance will seemingly attract more tech and unicorns to the public markets and further open the door for other sectors such as retail, energy and real estate,” said Jackie Kelley, EY Americas IPO Markets Leader, in a report issued by EY.
Following an IPO, however, there are a few areas of risk that come to mind, like: financial, strategic, compliance, and operational. Even though a company that has recently gone public is still a work-in-progress in terms of its IPO, it’s important for companies to keep up with the pace of their investors’ expectations.
Here are six best practices to ensure a successful IR program following your IPO.
Both designing and implementing formal disclosure policies are important – be sure to build a process for managing material, nonpublic information, as well as protocols for topics ranging from: quiet periods and quarterly earnings, to social media and training. Your IR department’s Disclosure Committee should also review the policies each quarter to make sure that there are evolving regulations and best practices being put in place.
Be in the know
Conducting an independent perception study of investors is always a good idea – it will help you understand some of the factors impacting your company’s valuation. The study – which should highlight real-time, post-earnings investor sentiment – can identify ways to refine messaging and communications channels. This will help your IR department compile and analyze a broad range of investor input quite frequently.
Focus on strategy
If you wish to effectively influence your shareholders, then examining your current investor base is key. This way, you’re better aligned with your company’s long-term strategy.
Extend reach to audience members
An online presence is key to your company’s success. Following your IPO, how can you heighten your online presence while extending your corporate website to an IR strategy? A good place to start is by sharing key facts about your company interactively – things like how it operates, and what drives success will collectively help your IR department to positively influence investment decisions.
Your IR website then becomes a tool with which you can effectively communicate with your investors and your management team. As a recently IPO’d company, you want to impress investors. You can achieve this by showcasing performance in ways that stand out. For example, you can bring your annual reports to life by making it easily accessible online – while overall heightening your corporate brand and story. The key here is to make content on your IR website innovative, dynamic, secure, and accessible – regardless of the device it’s being accessed on.
Connect with Investors
So, after a you’ve worked on incorporating unique and interactive content on your IR website, it becomes crucial that you engage with your investor audience thoughtfully. Investor days are an instance where your company’s executive team and business unit leaders can interact with investors and provide them with an array of knowledge. This can be done by incorporating webcasting and conferencing technology, ensuring that investors who cannot travel for the event don’t miss out.
Keep investors in-the-know
Sharing trade media coverage and trade show collateral with investors is one way to help them remain close to end-markets. Subsequently, you can widen your audience reach and improve your ROI on media relations and marketing budgets – making it a win-win situation.
Once you go public, and after all the excitement that comes with the IPO process, be sure to focus on how to be a public company and on how to constantly attract potential investors while maintaining existing ones. One of the very first places you can achieve this is by running the best possible IR website out there – one that is highly in-line with current trends.