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Key Takeaways Going public doesn’t create trust — it exposes whether you’ve built it, and companies that neglect compliance, communication and credibility often see their valuations unravel after the IPO.
Sustainable stock performance is driven as much by the CEO’s visibility and narrative as by the business itself, making trust a strategic asset rather than a soft skill.
Going public is supposed to be the moment a company arrives. For too many, it’s also the moment they begin to fall apart. According to a 2023 OTC Markets Group analysis of all 91 small-cap IPOs that went to NASDAQ and NYSE American the year prior, more than 92% were trading below their offer price within roughly a year, with an average return of negative 64.8%. More than one-third were already non-compliant with exchange continued listing requirements.
As CEO of Prowess, I provide consulting services to publicly-listed companies and CEOs preparing for liquidity events. Recently, I spoke at the NASDAQ IPO Summit to discuss life after listing. In my discussion with four of the most prominent operators in the field (related to SEC filing, Transfer Agent, Investor Relations and Capital Market Advisory), we explored the fundamental framework and structures of communication strategy and how CEOs and companies can build what I call a “Trust Stack.” I have seen firsthand how rapidly a bright, shiny, newly minted public company can lose value. Conversely, when companies develop a solid pre-IPO and post-IPO Trust Stack, they can maintain long-term relationships with their investors and long-term valuation.
I often think of a CEO I once consulted whose IPO opened near $45 a share. Within months, the stock had fallen to roughly $1. The CEO chose to “close a few more investors first” before investing in narrative strategy. The problem: those investors were not hesitating because they hadn’t heard the pitch enough times. They were hesitating because the strategic work hadn’t been done in advance to build trust post-IPO. As we will examine, it was all solvable.
If you are preparing for an exit or a post-IPO, trying to understand which levers may improve your stock price, here are four key areas to evaluate and improve.
Pillar 1: Compliance is the invisible foundation
When it comes to the Trust Stack, the financials are the foundation. Filing them on time and meeting your deadlines is critical. You may think precision isn’t exciting. However, without precision, all other pillars fall. The late-filed 10-Qs, the re-statement of financials and the missed SEC filing deadlines by 5:30 PM are loud signals to the marketplace and undermine trust. When institutional investors see these signs, they may interpret them as evidence that your company’s foundational numbers are struggling, operational execution is sloppy, or worse.
Companies that have gotten it right do not look at preparing to file with an eye toward the due date. They do not use their competitors as a reason to file on time. Rather, they develop muscle memory from going through thoughtful preparation and mock filing cycles. They backward engineer their reporting cycle and they make sure that everyone involved in the process is aware of and has agreed upon the timeline prior to facing a 5:30 PM deadline.
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