Companies are the engine of a country’s economy. On many occasions, companies need more funds to be able to take on new projects, continue to grow or expand internationally, or simply achieve greater corporate visibility to access financing more easily and quickly. In order to achieve these objectives, they need financing beyond the income they can generate from their own business. For these companies, one of the most efficient alternatives is to turn to the capital market and list themselves on the Stock Exchange; in its different markets (BME Growth -formerly MAB- or the continuous market, are the main options for companies).
Listing on the Stock Exchange provides visibility that enhances the company’s prestige and brand image. The entire process of starting the listing on the capital market requires an adaptation and professionalization from the company. Adapting processes and corporate governance ultimately make a company function better and more transparent. Once a company is ready to list on the Stock Exchange, it means that it has achieved a high degree of organization and control. Not only is this prestige recognized by investors, but also by employees, customers, suppliers, and the company’s financial partners.
The management and communication strategy definition of a company that decides to list on the Stock Exchange begins several months before the traditional New York Stock Exchange opening bell ringing. It is recommended that the design and execution of the communication strategy begin with the preparation phase of the operation. The key factor is team building and strategy alignment–the entire team of advisors must come together and coordinate to empower the company.
What do we look for in a good communication strategy? You seek to improve the perception and understanding of the company within the market, increase analysts’ coverage of the stock, and improve company awareness regarding its shareholder base and potential investors.
The first and most important thing is to build the equity story, the history and potential of the company. It also includes the investment proposal that facilitates communicating the different elements that make an attractive investment. This story is the basis of communication during the market debut. It must be unique, clear, concrete, structured, realistic, and must be systematically updated.
The next step is to define the company’s target audience for its Initial Public Offering (IPO). The most common target groups are banks, analysts, regulators, investors, suppliers, journalists, employees, and the public opinion in general. The objective for each of them is to be able to convey the same key messages, but with a language and format adapted to their needs and characteristics.
Investors and professional analysts’ interest regarding information about listed companies leads to a higher media presence in comparison to other companies, especially in the financial press, both nationally and internationally. Media presence, which is part of the company’s external relations, complements conventional marketing and advertising efforts with great efficiency–the stock market is in the news every day.
Communication, therefore, plays an essential role in the service of business management. In the case of an IPO, it is a unique opportunity to generate a positive brand image for the company, a moment in which our target audiences are more open to listening to our messages. Communication work throughout this process is the icing on the cake; all the work and effort developed during previous months receive the visibility and recognition they deserve.
Written by Patricia Cobo | Financial Communications Consultant
pcobo@atrevia.com
