Preparing for an initial public offering can be a daunting task. Once the process kicks off, the wheels spin faster and faster, with deadlines and opinions flying around from everyone involved. What can ease the burden and streamline the process?
Collectively, our team has helped hundreds of companies prepare for their IPOs, and seen the best and worst of what can happen during the process. We consider the year before the transaction critical and recommend these 10 must-do steps.
All public companies face the challenges of helping the investment community understand their business—how they’ll grow, how fast they’ll grow, what investments are required, and what kind of volatility there may be in their financial results. Those companies that can effectively communicate how they will grow, and then execute predictably, have the greatest potential to earn higher-than-average valuations over the long term.
The practice of providing financial guidance is a powerful tool for helping the market realistically frame its expectations for your performance, as well as for decreasing the likelihood that your actual results will miss the Street’s expectations in the near term. And indeed, according to IR Magazine, 68 percent of companies worldwide provide earnings guidance to investors at some point during the year, to create greater transparency for their shareholders and analysts.
The road show you take in conjunction with your company’s initial public offering (IPO) represents an exciting and action-packed two weeks. Over that period, you will crisscross the country, meet hundreds of potential investors and spend way too much time on airport tarmacs. While your bankers will have thoroughly prepared you to deliver your “story” to the Street, I thought it would be helpful to share some other thoughts about road shows based upon the thousands of IPO road show meetings Westwicke team members have participated in during our Wall Street careers. Here is my list of the top 10 things bankers probably won’t tell you about IPO road shows:
- You are always on stage. Be respectful and professional at all times – not just in the meeting but in the waiting area and car, as well. Often you will be traveling with an institutional salesperson so remember that this person has a relationship with the analyst or portfolio manager you are about to meet…don’t say anything that would allow them to give negative “color” to their clients.
- Let the person on the other side of the table get the question out. I see this all the time: senior management begins to answer the question in the middle of the question. Let the analyst or portfolio manager completely ask his or her question. Then, clearly answer that question. Continue Reading
When designing and maintaining an investor relations strategy, how important is your company website? Pretty important, it turns out. A Thomson Reuter’s 2012 survey showed that 84% of institutional investors use a company’s IR website as part of their research process. Importantly, 74% of respondents also indicated that the IR website has an impact on their perception of the company and its IR program.
First impressions are extremely important, and your website is often your company’s first chance to make an impression. Here are some key places investors go on your website, and some tips on how you can make their experience a valuable one (for them and for you):
- Make the site easy to navigate. If a website is not laid out logically and clearly, visitors will become frustrated and give up looking. Key information – such as presentations, press releases, SEC filings and other news – needs to be displayed prominently, allowing potential investors to get to it quickly. This doesn’t just apply to the investor relations section but the entire website. Don’t make it hard for investors to learn about your company and products.
- Make sure all info is up to date and accurate. Too many times, sites continue to display information that is wrong, or outdated. This can lead investors to assume that IR is not important to the company. Continue Reading
As my hairs have gotten grayer in the last decade, I can’t help but to have noticed the major transformation that has altered how humans interact with one another. The digital revolution has permeated every facet of my life (as I’m sure it has yours): from how I get my news, to how I stay in touch with my family, to how I do business each day.
The “greatest generation” (i.e., those who grew up during the Great Depression) saw the widespread adoption of telephones and television sets. This generation spent the majority of its working years communicating through pen and paper, typewriters, and “snail mail.” The children of this generation—i.e., the “baby boomers”—grew up with much more access to information than their parents, but the information was not immediate, not “in your face,” and not coming at you from half a dozen devices at once. The way these two generations worked was very different, but the two groups’ outlooks were not necessarily in opposition. Like me, many of you reading this are probably part of Generation X or Generation Y. While we also have distinct world views and experiences compared to the generations who preceded us, we still are markedly different from the youngest members of today’s work force.