Some IPO Quiet Periods Are Louder Than Others

PlanetRx.com had analysts chattering with an Aug. 31 announcement it was selling a 19.9% stake to Express Scripts (ESRX Quote), one of the nation's largest pharmacy benefit-management companies. But the talk was less about the news than about its timing, coming as it did right before the online drugstore was to go public.

"The timing is too coincidental," internet.com analyst Tom Taulli says of the PlanetRx.com alliance. PlanetRx.com, which is in its SEC-regulated quiet period, declined to comment for this story.

PlanetRx isn't alone: More and more companies are disclosing key strategic alliances right before their IPOs in a practice that can help put a positive spin on an offering. The risk is that some observers inevitably see these announcements as last-ditch efforts to gain publicity despite the quiet period, during which companies are prohibited from hyping their stock. ...