Lost in Translation, Lost in Investors: Mistranslations in IPO Can Negatively Affect Brand Credibility to the International Market


In September 2014, the initial public offering (IPO) of Alibaba raised $25 billion and pushed the value of the company to $231 billion. That was also the biggest IPO in history back then. Remember, Alibaba is based in China. What made this Chinese company such a trusted brand that made American investors on the New York Stock Exchange eager to put their money into it?

IPOs are all about trust. If investors cannot trust a company then they will not be willing to bet their money on it. In the case of a company like Alibaba which is based in another country with a different culture, a translation agency can play a crucial role in building trust for a company that’s about to go public. A translation agency can be instrumental in conveying the company’s message in another language more clearly.

Why Investors Would be Interested in International Initial Public Offerings (IPOs)?

An IPO takes place when a company that is privately held shifts to becoming a public company. Investors are on the lookout for international IPOs because of the possibility of large returns on their investments. A Chinese company for example might give more returns for an investor’s money compared to an IPO of a purely local company.

The problem with international IPOs is that some of the companies are not so well documented. Or in some cases, the documents are written in a foreign language. That makes investing in a foreign IPO tricky.

How Translating IPOs Can Establish Trust with International Investors and Regulatory Boards

Investors are always on the lookout for opportunities. Nasdaq has a list of popular IPOs which includes foreign ones. Reuters also has a comprehensive list. But it’s not enough to find an IPO on any of the popular lists for investors to trust it. They base their decisions on other information about a company. In the United States, a company that will be undergoing an IPO is required to file a prospectus. This report details its financial history and its operations. Investors can use the prospectus to determine if the company is a good investment or not.

A translation agency can translate the reports of a company for inclusion in the prospectus. A skilled translator can localize the language on the report to make sure it is a match for the new market. The investors who will read the report can gain more confidence in a company if it is well-written and has been properly translated. If the report gives them a clear picture of what a company is all about then they are likelier to trust it.

Possible Pitfalls: Mistranslation of Data Leading to Public Mistrust

Translating the prospectus of an international IPO can be prone to error. Because the report involves the financial and operational history of the company, there are a lot of numbers and data included. That increases the risk of mistranslations or other errors. Because the data is readily available to the public, such mistakes can be spotted by anyone.

When word goes out that there is wrong data on the prospectus of a company, that can damage its reputation. It would not matter if the wrong information came from a mistranslation or not. Investors will still be suspicious of a company. A brand can quickly lose trust that way.

Quality Assurance Management in Translations    

This is where the quality assurance management in a translation agency can play a crucial role in an international IPO. With proper quality assurance management, the chances of mistranslations and other serious errors can be reduced. A large translation company is typically the best choice for translating a prospectus and other business or financial documents because of the quality assurance processes that are in place.

Tomedes’ First-Hand Experience in Translating International IPOs      

As a translation agency that works on a global scale, Tomedes has worked on translation projects for international businesses. Some of these companies are based in China and while they are not as big as Alibaba, these companies were listed in foreign markets. The role of a translation agency is to make sure all the documents to be submitted for the IPO will be acceptable to the foreign market regulating bodies. That goes beyond accurate translation since it involves following the proper format.

From Client to Vendor: An Client-Focused Approach to Translations

For all of the IPO-related translation projects, Tomedes follows a client-focused approach to their translation projects. Their client-to-vendor process has been streamlined to ensure that the project will be routed to the most qualified translator/vendor. 24/7 chat support is available to ensure that all client questions will be addressed right away. 

Finance and Language Expertise with MT Application

The translation agency works with native translators who are specialists in the field involved in the projects. In the case of international IPOs, the translators tapped are all knowledgeable in the field of finance and business. When requested, Machine Translation Post Editing is also available as a service, which can deliver faster results.

Achieving an ISO Certified Quality Management

Tomedes has received an ISO 9001:2015 Certification which is for the best practices in quality management. The certification is a recognition of the translation agency’s efforts to ensure that the quality of its outputs more than meets the standards required by its clients. The company has also received other certifications, namely ISO 17100:2015 – Translation Services and ISO 18587:2017 – Machine Translation Post-Editing.

It takes a lot of hard work to achieve an ISO certification in quality management. It really requires proving that the quality management system in place is adequate for the needs of its clients.

Taking the Leap from Private to Public

Investing in an international IPO is really like taking a leap but with help from a reputable translation agency, it will not be a leap into the unknown. Investors will have more information on which they can base their decision to invest in a company.

It is not just the investors that want well-translated reports but the regulators of the target markets of the companies. They need accurate translations to decide if a company should be allowed to trade in their markets or not. International IPOs involve a lot of money and it’s just right that investors get all their information accurately and that’s where good translation comes in.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.