The True Test of an IPO: The Responsibilities That Follow Listing

Dr Vassilia Orfanou, COO, LUDCI.eu
Writes for the Headline Diplomat eMagazine

Introduction

Going public through an IPO (Initial Public Offering) is often seen as a monumental achievement—a company finally “arriving” in the world of major financial markets. It’s a cause for celebration, with the ringing of bells, media coverage, and the immediate influx of capital. But what happens after that momentous day? What responsibilities follow the excitement of a successful listing?

While many companies focus on the initial hype of the IPO—seeking to boost their stock price and attract the attention of investors—the real challenge comes once the ticker symbol is active. An IPO isn’t simply about raising capital or generating headlines. It’s about long-term value creation, maintaining trust, ensuring transparency, and living up to the high expectations of shareholders, customers, and employees. This is where many companies falter, particularly in the crucial early years following their public debut.

The Reality After the Ringing Bell

The IPO journey often feels like a victory lap. The company is suddenly thrust into the public eye, with every move scrutinized by analysts, investors, and regulators alike. The attention can be intoxicating, but it’s also fleeting. What happens when the media coverage fades, and the real work begins? For many, the true test starts just after the listing.

Despite the glitzy façade, the numbers can sometimes tell a sobering story. In fact, studies show that nearly 65% of companies fail to meet expectations in the first two years following their IPO. This failure to navigate the complex demands of being publicly traded can have devastating consequences—not only for the company but for the stakeholders involved.

Theranos: A $9 Billion Fraud

One of the most high-profile IPO disasters, Theranos, once valued at $9 billion, was a darling of Silicon Valley. Its founder, Elizabeth Holmes, promised that the company’s blood-testing technology would revolutionize healthcare. But the technology didn’t work, and the company misled investors, regulators, and the public for years. In 2021, Holmes was convicted of fraud and sentenced to 11 years in prison.

Luckin Coffee: The Chinese Coffee Giant’s Fall

Luckin Coffee, the Chinese coffee chain that went public in 2019, is another infamous example. The company’s rapid rise was accompanied by inflated sales figures and falsified financial reports. In 2020, Luckin Coffee revealed that its employees had fabricated hundreds of millions of dollars in sales, leading to a delisting from the Nasdaq. Several executives, including the CEO and COO, were arrested and faced criminal charges.

Wirecard: A German Fintech Giant’s Collapse

Wirecard, a German fintech company that once had a market capitalization of nearly €24 billion, is another cautionary tale. It was considered one of Germany’s top tech companies and was included in the prestigious DAX 30 stock index. However, in 2020, Wirecard admitted that it had inflated its financial records by over €1.9 billion. The CEO, Markus Braun, was arrested, and the company filed for insolvency. Wirecard’s collapse sent shockwaves through the European financial world, exposing flaws in the regulatory system.

Kodak: A Case of Missed Opportunities

Kodak, once a leader in the photography industry, is a prime example of how failing to adapt can cause a company to struggle post-IPO. Kodak went public in 1975 but its failure to embrace digital photography in time led to a gradual decline. By the time the company tried to pivot toward digital technologies, competitors had already taken over the market. In 2012, Kodak filed for bankruptcy. While not a fraudulent collapse like some of the others, Kodak’s downfall highlights the dangers of not evolving with the times.

Nokia: From Dominance to Decline

Once a global leader in mobile phones, Nokia went public in the early 2000s and was a dominant player on the world stage. However, as the smartphone revolution gained momentum, Nokia failed to keep pace with innovations in the industry. Despite early success, Nokia’s inability to transition into the smartphone era led to a sharp decline. In 2013, Nokia’s mobile phone business was sold to Microsoft for a fraction of its former value. Today, the company has managed to survive by shifting focus to other areas like telecommunications infrastructure, but its fall from dominance serves as a lesson for IPO-bound companies about the dangers of complacency.

Blue Apron: The Struggles of a Meal Kit Service

Blue Apron, a meal kit delivery company, went public in 2017 with high hopes, but soon faced fierce competition from rivals like HelloFresh and Sun Basket. Overestimating the appeal of their product and overextending their operations, Blue Apron struggled to scale up while remaining profitable. The company saw its stock price fall dramatically after the IPO, and it became clear that they hadn’t sufficiently prepared for the operational challenges of being a public company. Despite attempts to revitalize the business, Blue Apron still faces significant challenges in staying afloat in a crowded and competitive market.

What Comes After the Listing?

After an IPO, the work is far from over—it’s just beginning. While the initial funding may provide a boost, the focus must shift to making that capital operational. This requires a rigorous and transparent auditing process, strong corporate governance, and a clear commitment to building a sustainable and resilient company. But too often, companies overlook these critical components in favor of chasing short-term gains.

The pressure to meet quarterly targets, satisfy investors, and maintain stock prices can lead to toxic organizational cultures. It’s not unusual for companies to prioritize profits over people, fail to implement solid systems, or tolerate unethical behavior—all in the name of success. When this happens, it’s only a matter of time before the downfall begins. And unfortunately, it can be quick, especially when leadership fails to address internal weaknesses.

This is where I’ve seen many companies stumble. As someone who has helped numerous businesses secure funding, I can confidently say that while an IPO is difficult to achieve, sustaining that success is far more challenging. When the right processes aren’t in place—when the wrong people are in key positions, or when culture is compromised—the company is on the fast track to failure.

The Weight of an IPO: It’s More Than Just the Numbers

Not all IPOs carry the same global prestige or the same weight when it comes to responsibilities. The weight of an IPO isn’t solely measured by the dollars raised or the number of headlines it garners. It’s measured in the strength of the people you bring in, the people you retain, the level of education and corporate culture you cultivate, and the ethical framework you build.

Your company’s legacy won’t just be defined by stock performance. It will be defined by how the initial vision evolves after the IPO—how the ecosystem around the company grows, adapts, and creates long-term impact. This requires more than financial acumen. It requires leadership, integrity, and a commitment to building something sustainable.

A Blueprint for Post-IPO Success: From Day 1 to Year 2

To ensure a successful transition after an IPO, there are several critical steps that need to be taken. Here’s a basic blueprint for navigating the complex journey from day one of listing to the critical two-year mark:

1. Day 1 – Establish Strong Governance
   Immediately following the IPO, it’s crucial to establish robust corporate governance practices. This means ensuring that your Board of Directors is properly structured and that your executives are held accountable to both shareholders and regulatory bodies. It’s also the time to set up strong audit procedures and start managing stakeholder expectations.
2. Year 1 – Implement Auditing and Compliance Processes
   In the first year, the focus should be on transparency and compliance. The company should prepare for audits from external firms, ensuring full compliance with financial reporting standards. This is also the time to cultivate a healthy corporate culture that prioritizes ethical decision-making, diversity, and inclusion.
3. Year 2 – Build Long-Term Investor Relations
   By the second year, the focus should shift to building relationships with investors. Regularly update them on financial performance, future growth strategies, and regulatory compliance. It’s essential to create a long-term vision and communicate how the company plans to sustain growth, weather market fluctuations, and continue delivering value.
4. Continuous – Address Leadership and Culture
   Continuously address any gaps in leadership and ensure the company’s culture supports both financial success and ethical behavior. Remember, the right leadership can set the tone for success, while poor leadership can lead to a toxic environment.

Conclusion: The True Test of an IPO

An IPO isn’t the finish line—it’s the starting point of a far more demanding journey. While a successful listing can unlock new capital and market credibility, it also amplifies scrutiny, expectations, and the need for strategic foresight. History has shown that even the most promising public debuts can unravel due to weak governance, poor transparency, or cultural mismanagement. Companies like Theranos, Luckin Coffee, and Wirecard serve as cautionary tales, proving that an IPO alone is not a guarantee of success—it’s what follows that truly defines a company’s future.

To stand the test of time, businesses must evolve beyond short-term gains and focus on long-term resilience. True IPO success isn’t just about raising funds—it’s about building a company that consistently delivers value, operates with integrity, and adapts to an ever-changing market landscape. Those who fail to recognize this will inevitably struggle. Those who embrace it will thrive.

Call to Action – Thriving Beyond the IPO Bell

The ringing of the IPO bell is exhilarating—but make no mistake, it’s not the victory lap. It’s the gunshot at the starting line of a relentless race. The spotlight is now on you. Investors are watching, analysts are dissecting your every move, and the market is demanding results. The question isn’t whether you can go public; it’s whether you can stay strong, innovate, and prove your worth over the long haul.

So, what separates the companies that rise from those that fall?  Strategy, integrity, and relentless execution.

• Master the Art of Governance – A strong, visionary leadership team isn’t just a bonus—it’s your survival kit. Governance isn’t bureaucracy; it’s the framework that keeps your business from imploding under its own weight.
• Turn Transparency into Your Competitive Edge – Investors don’t just invest in numbers—they invest in trust. Make integrity your brand, embrace compliance as a non-negotiable, and set the gold standard for corporate transparency.
• Build Investor Loyalty, Not Just Interest – Your IPO got their attention, but what will keep them engaged? Move beyond quarterly earnings calls. Deliver a long-term vision so compelling they won’t just hold your stock—they’ll champion your mission.
• Forge an Unstoppable Company Culture – Toxic cultures kill companies faster than bad financials. Prioritize ethics, innovation, and resilience. A thriving internal ecosystem fuels external success.
• Are you ready to turn your IPO into a lasting legacy? Because this is where real leaders separate themselves from the rest. The companies that dominate the market aren’t just the ones that go public—they’re the ones that commit to excellence, adapt to change, and lead with purpose.

Your IPO was just the beginning. Now, it’s time to build something that lasts.

Featured photo by Nataliya Vaitkevich: https://www.pexels.com/photo/woman-in-green-and-white-polka-dot-shirt-covering-her-face-7172857/