I Have the Right to Know!!

Capital markets communication undergoes significant transformation pre-and post-IPO. Before an IPO, the focus is on growth potential, market opportunities, and the company’s unique value proposition, as the company primarily targets potential investors. Messaging is often aspirational and optimistic, and the focus is mainly on generating interest and excitement among potential investors, which may involve fewer but highly targeted communication efforts. Communication is more concentrated around specific events, such as roadshows and IPO launches, and Companies are less regulated and have more flexibility in their messaging.

Post-IPO, the narrative starts to shift toward transparency and accountability. Regular financial disclosures, quarterly earnings reports, operational updates, and communication become more structured, focusing on performance and strategic direction, as consistent and regular financial health and progress updates are required and expected.

This requires companies to experience a significant shift in communication and communication strategies after an IPO, which differ significantly in several critical areas regarding transparency and accountability. What does this actually mean?

Public companies are subject to much more stringent regulations. They go from less structural to structural as they must file regular reports, including quarterly/half-year earnings and annual reports, which require detailed financial performance, risks, and operations disclosures.

Let’s start to talk about transparency. Companies must provide clear and comprehensive information about their financial health, management practices, and strategic initiatives, allowing investors to make informed decisions. Sometimes, balancing being open enough without harming business and competitiveness might be difficult.

Trust that you can trust us is not a cliche. An ongoing dialogue is crucial in building trust and allowing immediate responses to investor concerns.

With heightened scrutiny comes preparedness for crisis communication and proactively managing adverse events or market fluctuations that ensure that stakeholders are informed promptly as stakeholders and investors start to receive information from several sources. And, while the focus begins to expand from merely attracting investors to actively engaging with them, investor relations could be good to help with the storytelling and IR strategy (which must reflect your company strategy)!

The above is highly simplified but gives you a picture of the mindset change management needs to have because that is what it is: a change in your investor relations and communications strategy and style. It might sound like a handful; in a way, it is, as few like change. The good news is that whether you are on your way to a potential listing or already are listed, you can continuously improve how you interact with your stakeholders.

We are here to help! With our IR specialists and senior advisor network, you do not have to reinvent the wheel. In addition, we have a 6-step module-based IR solution to support you and bridge you through your transition, making the work more manageable and less time-consuming.

Writer: Sophie Jolly

Sophie is the Partner heading Capital Market Communications at HTGP and founder of Gottir