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Promoting a Newly Public Company
Communication challenges and opportunities.
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 by Jim Barbagallo
3Point Communications

Jim BarbagalloWhile investor sentiment toward stocks has been negatively influenced by the recent volatility in the financial markets, interest in IPO's has remained steady.  

The number of global IPO filings in 2010 is about 120 and indications are that there are many to follow. Of the companies that already have filed, a staggering 65% have come from Asia, with China leading the pack. So the uptick in filings year-to-date is a global phenomenon, which speaks – in part – to the resilience of the global economy.

Asia, Europe or North America – the benefits of going public are fairly universal: greater and more inexpensive access to capital, enhanced opportunities to pursue mergers and acquisitions, increased liquidity for shareholders, a stronger corporate image and another tool to incentivize executives and employees.


A benefit of being a public company is the opportunity to earn significantly more interest and coverage from business and financial information channels –major newspapers, business magazines, TV, radio, financial and business web sites and other media outlets.

However, the benefits of enhanced publicity comes with the increased responsibility of communicating appropriately – leveraging newfound media attention to support strategic business goals but all the while playing by fair market rules and maintaining corporate transparency.

Following are a few guidelines to help you become aware of how to take advantage of the benefits and avoid the obstacles.


Media relations is vital if you know the rules.  While an effective media relations program can help increase demand for company stock, newly public companies learn quickly that the rules of the road are infinitely more complex than when operating under the protection of private ownership.

1. Audiences Change

Once a company lists its shares on a public exchange, its key stakeholders extend far beyond media, market researchers, customers, business partners, and employees to include financial analysts, shareholders, shareholder interest groups, and government regulators.

2. Scrutiny Increases

Not only does the communications landscape scale once a company goes public, it also has the potential to become more hostile. Public companies often come under intense scrutiny and attacks in traditional as well as new media, such as in the blogosphere, which can provide forums for “watchdog investors” and disgruntled employees.

3. Regulations Prevail

Quiet period rules strive to lower company awareness in the market, just as media and public interest may be picking up. The cost of noncompliance with quiet periods and numerous other restrictions can be devastating. Regulation Fair Disclosure, known as Reg FD and Sarbanes-Oxley can be daunting, and a company must be sure to fit its strategies within these regulations.

If a company's stock exchange senses hype in the media, the exchange can ask the company to temporarily retract its offering. While second chances do exist, filing for an IPO takes significant resources, and can take away focus from day-to-day company operations. There's a premium on doing it right the first time.

New public companies can avoid costly missteps by adopting a new communications approach that addresses all stakeholders and encompasses all pertinent communications disciplines.

1. Employee Education

Employees are an especially important group. Experience has proven that employees are more motivated when they clearly understand company actions and decisions and have a sense of personal stake in the outcome.

The employee communications discipline can take the form of a program aimed at educating employees on behavioral changes and expectations within a newly public company.  For example, once a company goes public, employees have no right to material information before other shareholders.

2. Using Communications Teams

Investor relations, corporate affairs, public affairs and crisis management must be equipped to manage and contain media reactions during turbulent times though the rapid dissemination of accurate, comprehensive information. It's much easier for a company to keep its credibility than to rebuild it.

Communications team members need to function as strategic counselors to management teams and ambassadors to broader staff. They need to clearly understand and advocate the subtle differences between media activity that is advantageous and “safe,” versus potentially risky and damaging during a quiet period – helping to maintain and build company awareness in the market while simultaneously abiding by new regulations.

3. Social Media

Social Media as practiced with tools like Facebook and Twitter creates an entirely new set of uncharted disclosure issues. On one hand, companies may opt toward transparency and provide information in direct opposition to fair and equal disclosure requirements. On the other hand, some companies simply restrict using social media for investor communications, despite the widespread popularity and advantages of these media in crisis situations.

Despite the desire for transparency, we advise clients that corporate legal and IR teams must get involved in social media to protect the company from violating disclosure requirements. The risks simply don't outweigh the benefits. 

Jim Barbagallo is a partner at 3Point Communications,
 a global communications consulting firm specializing in creating content centered public relations campaigns for technology brands. 

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