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Following the IPO

After the IPO, an effort is required to preserve and improve the company's position in the capital markets. In order to maintain a viable secondary market for the company's shares, constant interest in the share needs to be kept up by providing enhanced disclosure to shareholders and analysts, holding conversations and conference calls with analysts, and filing periodic reports. A large part of the disclosure is based on expectations which do not amount only to the reports required by law, but extend to the degree of the company's ability and willingness to answer questions by investors and their representatives, make timely reports and give warnings regarding its operating results.

Nowadays, the price of many companies is discounted due to the lack of their managers' initiative in marketing the company to players in capital markets, participating in important conventions, and so forth. Companies invest many efforts in marketing information about their financial results and their current and future product and service packages. This information is marketed to the company's existing investors, but also—and mainly—to potential investors. The information is marketed by press releases, PR firms, and various conventions, either professional or for the capital market. This field of investor relations has a material impact on the company's market value. A company's results are measured by its actual financial performance, and the market expectation of its future performance. Since these estimates are based on the information which is available to the people who make the valuations for the purpose of investments, the significance of information dissemination to the financial community is immediately visible. The impact on the share's short-term value is significant for the purposes of raising capital, recruiting employees, and for acquisitions made with the shares being a component of the price.


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