IPO

Financial and Capital Market Communication

Companies go public because they need capital for further growth or because the shareholder base is to be reorganised. Sometimes for other reasons. But an IPO is always a key moment for positioning a company in the capital market and in the public arena. Strategy and objectives are redefined. The management team becomes widely known. Critical investors, analysts and journalists need to be convinced. An IPO may also offer critics a welcome stage. Communication takes on strategic importance.

Typical challenges

Formulating the company strategy and “story” in the language of investors

The equity story must be compelling and easy to understand - and the promises must still be deliverable.

Unclear positioning among peers and competitors

Investors struggle to place the company sensibly within its competitive environment.

Low visibility

Many companies start out with a visibility deficit. With early preparation, this can be remedied.

Visibility of management...

CEO and CFO play a key role in an IPO. How should they position themselves?

... possibly combined with their lack of experience in capital market and media dialogue

CEO and CFO are not yet seasoned in discussions with analysts, investors and the media.

Dealing with rumours and market leaks

The premature leaking of incomplete information can jeopardise the process.

High communication pressure collides with disclosure rules

Expectations regarding communication are high, but legal requirements limit the room for manoeuvre - in social media, for example.

Building functioning IR and disclosure processes

Processes for ad hoc disclosure obligations and financial reporting must be in place no later than the first day of trading.

What can go wrong in IPOs...

Specifics on valuation: too soon, too pushy. Credibility suffers ahead of IPO.

Lack of preparedness for potential issues, weak governance, pending legal cases, you name it.

Thin-skinned executives. If you can’t stand the heat, get out of the kitchen.

Amateur like PR/IR set-up. For press release distribution, website, conference calls etc

Overpromised and underdelivered. Credibility suffers post IPO.

... and opportunities that can be used

Be different! Use IPO for distinctive positioning, as attention is high.

Distinct executive profiling. It's the rough edges that make a person what he / she is.

Develop media awareness, slowly, but surely. Relation building at an early stage is supportive.

Use momentum to build reputation in local / industry context. Integrate plan for employee comms and community relations.

Better risk management thanks to better communications governance.

Relevant insights

Reading material by IRF staff on IPOs and capital market communication:

Here is how to secure the applause on the first day of trading

Our expert summarises the ingredients for a successful IPO from a communications perspective, including practical tips. Read more in the blog.

SIX Investor Relations Handbook

It contains everything worth knowing about life as a listed company. The handbook was written by an IRF partner.

Guidance study: How can capital market expectations be managed?

“Managing Expectations” is one of the most demanding tasks in the IPO process and as a listed company. This IRF study shows how large companies listed on SIX provide guidance. The most common target metrics are revenue and operating profit (EBIT, EBITA or EBITDA). Click here for the full study.

Ad hoc disclosure obligations - cornerstones of the stock exchange ruleboo

What can be learned from the mistakes of others? Our expert gives you an overview of the sanctioning practice of Swiss Exchange Regulation in the area of ad hoc disclosure. She also summarises the origins, objectives and implementation of the directive.

Do listed companies need a quarterly report?

Probably not, says our expert. In this short article, she explains in which cases it may nevertheless make sense.

Jürg Stähelin

lic. oec., Partner

Marina Winder

Lic. phil. I, Partner