Preparing for an initial public offering (IPO) is one of the most crucial phases of business. Companies should carefully plan for its launch to give themselves the greatest chance of success and minimize any surprises during its launch.
Social media plays an instrumental role in an IPO launch process, so here are some tips for capitalizing on its hype.
Only limited studies have examined the correlation between social media activity and initial public offering (IPO) performance and Twitter sentiment analysis. Gregori and Wang found that tweet sentiment positively correlates with first-day stock returns; however, its magnitude may be limited.
Twitter was established by Jack Dorsey, Noah Glass, and Biz Stone in March 2006 to allow people to send and receive short bursts of inconsequential information known as tweets with each other and with the world at large. It officially went online in July 2006.
This study examined tweet volume during and after an IPO and concluded that firms with high volumes of twitter chatter experienced higher average returns. Univariate analyses demonstrated this finding by showing that firms with more tweeting tend to be larger with higher yields and stronger contemporaneous correlation between tweeting activity and return - especially among small firms (See Table 5 for illustration). These conclusions can be seen illustrated here.
Reddit, the community-oriented social media platform with an enormous following, is seeking public listing. However, much work remains to improve user metrics and demonstrate its business model can monetize; currently Reddit loses $100 million annually and its revenues are heavily affected by research and development expenses.
The company hopes to raise $748 million through 22 million shares priced at $34, at the upper end of their pricing range. That valuation would give them a fully diluted valuation of $6.5 billion compared to their earlier private funding round which raised $10 billion.
Reddit has received backing from investors like OpenAI founder Sam Altman and Conde Nast owner Advance Publications, owner of the New York Times. However, Reddit's advertising model is ineffective and revenue significantly less than rival platforms - potentially making long-term expansion difficult to sustain.
LinkedIn was launched by venture capitalist Reid Hoffman as a platform that allows individuals to create professional resume-like profiles and connect with colleagues, friends and business contacts. LinkedIn facilitates job-hunting by helping job hunters identify relevant skills and experience to feature on their profiles; additionally it provides policymakers, employers and workers with data-driven insight on patterns which help balance supply with demand in workforce supply/demand models.
LinkedIn users can interact with each other by sharing posts, liking and commenting on content, congratulating or messaging each other. LinkedIn also serves as a marketplace for businesses to market products and services; their carousel ads allow companies to feature multiple images and headlines in an easily scrollable carousel format.
LinkedIn provides third-party applications access to its data through an API, but users have raised privacy concerns. In 2017, the site issued a cease-and-desist letter against hiQ Labs, a Silicon Valley startup which analyzes public profiles on LinkedIn and offers invitations from its database of IPO candidates for clients.
Influencers
Preparing for an initial public offering (IPO) is one of the most significant milestones a business can experience. Although preparing requires comprehensive financial and administrative preparations, too often businesses overlook an essential element in this process: devising an effective marketing strategy to promote it on social media.
Influencers are people with large online followings who have built a reputable presence online and earned recognition in certain niches. Influencers can range from bloggers, social media celebrities or other recognizable figures who have established an audience due to content creation or other means - whether this involves blogs, social media channels, appearance or another factor altogether.
Influencers are highly sought-after experts for their ability to engage audiences and drive conversations on behalf of brands. Influencers possess an uncanny knack for creating excitement about new products or services, making them invaluable partners for marketers looking to develop engaging social media campaigns with real results. Furthermore, influencers possess a deep knowledge of their audience's preferences which allows them to tailor messages and products specifically to each member's individual needs and wants.