Just two months into the fourth quarter of 2015, over 50 companies have filed for an initial public offering. As each of these companies hits the open market, their management teams are putting themselves in the position to take advantage of amazing opportunities to raise capital and enhance their corporate prestige. As soon as the opening bell sounds on pricing day, millions of new investors as well as hundreds of sell-side analysts and influential journalists can now lay their eyes upon critical details of these newly public companies so they can understand what they do and how they profit. It’s an exciting and scary time for senior executives and corporate communicators alike.
The IPO process completely transforms the corporate communication cycle even for companies that have been established on the private market for decades. The need for companies to adapt to this change resembles that of network news with the advent of the 24-hour news cycle. Market shifts and other critical developments can strike at 1 AM, hastening the need to respond to external events rapidly. Companies whose corporate communications and web development teams work traditional hours may find themselves ill-equipped to respond when that happens.
Industries that are used to higher barriers of entry are the most liable to fail to meet evolving communication challenges posed by the transition to capital markets. A government contractor can no longer fill its website with jargon that mystifies people outside of a Defense Department procurement office when Wall Street starts to scrutinize them. Biotech marketers may find the complex scientific explanations of their value don’t cut it now that hedge fund managers are defining the perception of their firms.
When a company goes public, the base of key stakeholders evolves beyond traditional business constituencies. Senior management teams now have to run their companies in accordance with the whims of corporate boards, employees, partners, buy- and sell-side analysts, debtholders, the media, consumer groups, environmentalists, as well as government regulators with new compliance demands and new points of transparency. All of these people use blogs, news releases, financial news sites, Bloomberg terminals, and business cable channels to find out about the companies they care about. As the sources of information and types of interest groups diversify, most companies still have a single port of call to take control of their narrative in real time – their websites – and the people in charge of these websites now find themselves in need of a multi-tiered strategy just to keep pace.
The C-suite understands that going public combines the opportunity of millions of new people who can provide capital with the uncertainty of ownership changes in the future. The fact that anyone with enough cash can buy as much of their stock as they want means they could lose control of the very entity they built. Similarly, as millions of new eyes greet public companies for the first time, mishandling the new corporate communications landscape could mean losing control of the narrative, which could threaten the equally hard-earned corporate reputation.