When it comes to IPO sex-appeal, your company has either got it or it ain’t. It’s a fact of life that some new listings effortlessly attract attention and compel analysts and investors to huddle around computer monitors and morning papers, oohing and aahing as the progress of these celebrity market infants dip and soar. Whether it’s for the macabre schadenfreude of a surefire demise or the giddy thrill of a dead-cert money spinner, launch-watching can be gripping.
But it can also be dull. Some launches invade the consciousness of investors about as much as pop music invades the consciousness of the elderly. Wave after wave of companies come to market with high hopes only to find themselves lost in the melee. So what can you do? When your company struggles to register even a flicker on the media Richter scale, how can you stand out from the crowd?
The Nasdaq Stock Market recently took launch visibility to a new level with a facility in one of the world’s most visible spots: New York’s Times Square. Maggie Kelly, Nasdaq’s vice president of international markets, says the Nasdaq Market Site is an ideal arena to showcase listings. ‘It acts as a media center where television crews can gather. We also have a 100-screen TV wall and, outside, there’s a video display that’s eight stories high. It’s not a trading floor but it’s an impressive visual display.’
Despite staking out the high ground in the heart of show biz territory, Nasdaq shows more restraint than some markets do. Indeed publicity stunts are often a cheap and cheerful way to turn heads. And it’s a gambit used by more and more companies nowadays. ‘Publicity stunts?!’ the IR purist would spit in disgust. ‘My company will never descend to such tawdry tactics – it’s little more than media prostitution!’ Fair enough, but investor relations these days is about more than straight-laced, open, honest communication. Now in IR, as in love and war, all’s fair.
‘It’s about making a bit of a splash,’ says Steve Lenehan, head of IR at South African gold company Anglogold. And he should know. When Anglo celebrated its move to a level III ADR program in 1998 it courted attention – and reinforced the company logo – by inviting a lion to the trading floor of the New York Stock Exchange. That’s a lion – a real, actual, live lion. ‘We had Arthur on the balcony,’ explains Lenehan (he and the beast are on first name terms). ‘He stood there next to Dick Grasso (NYSE chairman) and our CEO, Bobby Godsell. I was down on the trading floor with the traders. In fact, people said that it was probably safer up there with Arthur than down where I was. We also had the chorus from the Broadway production of The Lion King.’
So what was the substantive effect of the stunt? ‘It attracted a lot of media and investor attention,’ Lenehan concludes. ‘We had a color photograph on the front page of the Financial Times. And we’ve also had some very positive feedback since. It’s still talked about now.’
Clowning around
Marty Shea, head of IR at Viacom in New York, can probably say the same for his company’s launch. After all, as he points out, ‘We slimed Frazier!’ Viacom, the US media group, reaped a few acres of column-inches with its mad-cap slapstick publicity stunt. ‘Nickelodeon is famous for its Slime Machine from the program, Double Dare,’ Shea explains. ‘We put Dick Grasso, our CEO Sumner Redstone and actor Kelsey Grammer in it and slimed them. They were prepared for it, with hats and coats on and it was only apple sauce and sugar. Another time Rene Russo came and she really wowed the traders. The Playboy Playmates have been there too – they nearly closed the exchange!’
Shea argues that such stunts achieve more than a bit of free publicity. He believes that they can send out positive signals about the company. ‘It’s an outstanding opportunity to show the imagination of the company and it also shows that we’re proud to be on a great exchange.’
The NYSE does something like this about once a week. ‘It encourages a company to make the listing a big celebration and draw attention to itself,’ says Kim Freeman, head of corporate communications at Bowne. Bowne marked its switch from the Amex to the Big Board with the Bowne Open on Wall Street. Broad Street closed to make way for golf driving cages and putting greens and money was raised for the Robert Bowne foundation for youth literacy.
‘The event was scheduled for June 17,’ says Freeman, ‘the day of the US Open golf tournament. We thought golf would be a good way to communicate the trust that has to exist between the printer and the financial world – trust that is often built up over a game of golf. We were one week away from holding the event when New York revoked our permit because Al Gore was to announce his decision to stand for president that day. We held it on July 1 instead. Unfortunately, that day Richard Grasso shaved his head. I was a bit chagrined that he’d taken some of our coverage but the day was a lot of fun.’
Freeman has no doubt such stunts work. ‘I think Bowne’s profile was reconfirmed on Wall Street,’ she says. ‘It also allowed us to acknowledge the prominence of the NYSE and give our employees a nice shindig.’
And for any IROs dismissing such stunts as a logistical nightmare, Freeman retorts that they’re no real headache. ‘The communications and special events staff at the NYSE really know how to do this well. You have a choice between a very simple, turnkey affair or going all out. And in that case the NYSE do all the hard work. They’ll secure the permits and give you their special events staff. They really know how to do it.’
They’re all at it
But it’s not just the Big Board that can put on a show. The Amex also goes to great lengths to publicize its new recruits. Blimpie International’s listing in 1998 was on St Patrick’s Day. To the tunes of Irish bagpipers (similar to the Scottish kind but slightly less painful), Blimpie dished out corned-beef versions of the company’s famous subs for floor traders and passed out hats with the new ticker symbol ‘BLM,’ as well as baseballs and other souvenirs. Traders and brokers were also treated to the sight of the company’s mascot, the Blimpie Bear (not a real one).
Nasdaq, likewise, is not disheartened by the fact that it lacks a trading floor to stage lavish launch events, especially now that it has created the Nasdaq Market Site in Time Square. Maggie Kelly points out that this isn’t merely a copycat version of the NYSE – and its launch stunts seem to be less outrageously press-hungry. ‘We don’t use animals,’ quips Kelly.
No, Nasdaq launches don’t necessarily resort to the whistles-and-bells approach. ‘Buy.com is more consumer-oriented,’ Kelly says. ‘At that launch, they had a stand and were passing out their products to the public. That created a lot of excitement.’ On the other hand, she cites the IPO of Infosys as a shining example of Nasdaq’s techno-savvy approach. ‘We encourage a lot of our international companies to invite their own press and sometimes have a simultaneous web cast,’ she comments. ‘Infosys was the first Indian company to list on Nasdaq and we had ladies dressed in saris – there was a lot of color. But we also used the video wall to display images. It’s very versatile. We made it seem like India but without having to use live elephants.’
Nasdaq presumably learned from the experience of the Madrid stock exchange. In May 1999, on the IPO of Parques Reunidos, a Spanish leisure group that operates zoos and amusement parks, a live elephant was drafted in to trumpet the big day. Weighing in at a couple of tons, eleven year-old Clarissa grew bored of the proceedings and broke free from her shackles. The belligerent beast then stormed through Madrid during the morning rush hour, squashing traffic signs and scattering pedestrians. The jumpy jumbo was eventually stopped with a tranquilizer gun. Parques Reunidos’ shares fell 4.4 percent that day.
If that doesn’t convince you that not all publicity is good publicity, just ask tennis star Monica Seles. In August 1998, she had the pleasure of ringing the opening bell on Wall Street on what turned out to be the second worst plunge in the New York Stock Exchange’s history. US stocks plummeted 512.61 points, losing 6.37 percent of their value, after Seles tolled the bell to begin trading. Protesting her innocence at the time, Seles said, ‘It’s not my fault. I did my part. When I left it was up 43 points.’
Apart from Madrid, Europe enjoys little in the way of publicity-pulling launches. Perhaps cultural differences are to blame; stereotype dictates that the US is far more hooked on show biz than the rest of the world. ‘There’s been nothing exciting here,’ says a spokesman for the Paris Bourse. ‘There was an Australian company that listed on the Nouveau Marche. The chairman used to be a pilot in the Australian army so he rented a plane and flew 120 of his staff to Paris for the day. And there have been a couple of fancy IPOs with balloons and decorations but since we have no floor it is much less spectacular. I know Madrid had a problem once with an elephant that ran loose in the streets of Madrid during an IPO.’ Evidently it’s not just elephants that have long memories.
Party poopers
The UK doesn’t enjoy much razzmatazz either. Are there no special launch events on the London trading floor? ‘The short answer is no,’ comments a London Stock Exchange spokesman. ‘We get a lot of calls asking if anyone offers a service but at the moment I don’t think anyone does.’ The exchange, to some degree, has its hands tied, however. ‘We’re the listings authority,’ the spokesman continues, ‘so we can’t publicize companies whose documents we’re looking at. There’s an obvious conflict of interest there. But the listings authority is going to be moved over to the Financial Services Authority soon so things will probably change. There is certainly a demand for greater publicity for new listings, especially from retail investors.’
Some companies are concerned that publicity stunts might risk sullying their company’s image in the eyes of the more serious investment community. Viacom’s Shea disagrees entirely. ‘Investors don’t infer anything negative,’ he maintains.
‘It’s a stunt,’ agrees Freeman. ‘Everyone knows that but it did get us plenty of publicity.’ Besides, put yourself in the shoes of your audience. Your company might have real potential, a unique selling point and strong management. Good for you. But will that get as much press coverage as your CEO being covered with slime or your mascot being dragged through the streets by a crazed animal?
