xavGE

IR and communications
5.1 Preparing an IPO communications
strategy
FTI Consulting
There is a strong temptation to view IPO
communications as a listing-day event,
meticulously planning for the inevitable
publicity surrounding day-one trading. In
reality, preparation should begin well before
the registration statement is filed to ensure
consistent messaging and a strong baseline
of communications before the “quiet
period” begins.
Although the IPO prospectus will
be the primary selling document for the
offering, investors and media will look
as broadly as possible for further insight
into the company, its business and its
competitive position. The company should
therefore conduct a thorough assessment
of its brand and reputation, as perceived
by customers/clients, employees, vendors,
regulators, industry analysts and other key
stakeholders as early as possible in the IPO
process so that any remedial actions can
be taken before it becomes constrained
by quiet period rules. Generally,
communications made more than 30
days before the filing of the registration
statement will not be considered
impermissible “gun jumping,” as long as
they do not talk about the offering.
In particular, the company should
review any public commentary about
its financial results or growth prospects
to identify discrepancies between what
previously was disclosed/anticipated and
the information that will be presented in
the upcoming SEC filings.
The company’s communications
review should include the following:
• Media relations activities—the
IPO will attract attention from an
expanded media universe focused
on performance, growth potential
and other financial events. While
the majority of the work in building
these new media relationships begins
after the quiet period, the company
should ensure that key industry
reporters accurately understand its
business strategies and differentiators
in advance of the initial filing of the
registration statement. Activities could
include a series of reporter briefings
(assuming an appropriate news hook),
a review of boilerplate language,
updates to executive biographies and
the creation of company fact sheets,
which can be posted to the website.
Additionally, the company should
review its press release strategies
to maximize opportunities for a
consistent flow of announcements
during the quiet period (i.e., establish
a baseline of new product/client
announcements, key milestone
updates and other news to avoid the
appearance of “gun jumping” during the
registration period).
• Website—many prospective investors
and covering reporters will visit the
company’s website, so it is important
that the site reflects the image the
company wishes to convey, that
corporate information is easily
accessible and that all data points
are consistent with those provided
in the IPO registration statement.
In addition to reviewing the site for
accuracy, the company should consider
adding information about its mission,
vision, and values; an online media
kit; executive biographies; lists of
historical accomplishments and other
reference documents. These materials
will be important media and investor
relations tools to bridge the gap when
communicators are unable to speak
directly with their constituents.
• Marketing materials and other
customer communications—
the company should review its
marketing materials and customer
communications to ensure that
messaging and statistics are
consistent with the language in the
IPO registration statement. Equally
important, it should train public-facing
employees (e.g., receptionists, sales
force, customer service representatives
and others) to respond to external
inquiries within the confines of SEC
regulations and to forward questions
outside their respective areas of
responsibility to the appropriate
communications representatives.
• Employee communications—as with
any major change, an IPO can lead
to employee uncertainty. Employees
may have questions about how the
IPO will affect their jobs, what new
opportunities are available and whether
they will be able to purchase shares.
Additionally, they must understand
that compliance with disclosure rules
and internal control requirements is
everyone’s responsibility and that there
are repercussions for the individual
and the organization for not adhering
to these rules. Training and education
on the IPO process—articulating the
expected milestones—as well as setting
clear expectations about what it means
to be part of a public company, will
help eliminate confusion.
• Business partner communications—
outreach to this group is very much
contingent upon the degree to which
relationships with business partners
are expected to change following the
listing, if any. A company may be
required to disclose information about
its top vendors or customers in its
registration statement and subsequent
filings with the SEC following the IPO.
In these cases, outreach to inform
partners of the required disclosure
or to communicate any changes in
interaction with them may be advisable.
Additionally, management may want to
consider communicating to business
partners more generally around the
IPO listing to promote the message
of “business as usual” or to reinforce
the benefits (e.g., growth, investment,
change in capital structure) of the
transaction.
Among the company’s most
important tasks in building out a
communications platform as it prepares
to go public is the development of a
comprehensive strategy to interface with
a crucial new audience—the investment
community. The way in which the
company communicates to the financial
markets significantly impacts its status
in its industry, the perceived value of its
business, management credibility and
ultimately the valuation of its securities
in the markets.
Preparing for an IPO includes
establishing protocols for how the
company will engage with investors, what
information and operating metrics it will
provide, how it will report its financial
results and what communications channels
it will use. The IPO process will place the
company under acute public scrutiny and
set in motion a whirlwind of activity. It is
50 NYSE IPO Guide