For a young company on the fast track, going public can be a powerfully attractive option. But the public markets also can hold risks that a company is powerless to confront. TIE/communications Inc. learned that the hard way. It was irregularities in the trading of TIE stock on the American Stock Exchange last fall that prompted the investigation of a Wall Street Journal reporter for leaking market-sensitive information.

The Shelton, Conn.-based telecommunications company, which last year saw sales jump from $171 million to $324 million, was hit by a sudden surge of short selling last October 19. The next day, it was the subject of brearish "Heard on the Street" column by Journal reporter R. Foster Winans, a coincidence noticed by both an Amex specialist and TIE officials. Their suspicions led the Amex to conduct a lengthy investigation that last May resulted in a Securities and Exchange Commission lawsuit against Winans and four others.

Like many of its small, rapidly growing counterparts, TIE had graduated to the Amex after being traded over the counter for five months; its 1980 annual report trumpeted the move with an "Amex Welcomes TIE" banner splashed across the cover. And, despite the buffeting the stock took in the market, TIE officials seem to have adjusted to the risks of being public. "Everybody around here knew about [the Journal leak]. Everybody regarded it as reprehensible. But there was nothing we could have done about it. We're just glad the SOB got caught," says Howard Perrill, vice-president for finance. "These things are totally beyond our control. Some guy conjures up something out of his imagination or based on some subjective considerations, and there is really nothing we can do about it. After all, we are a public company."

That sense of helplessness can come as a surprise to companies that have grown used to the relative freedom and control that come with being privately owned. "In a situation like this, there isn't much you can do," comments Terry Van Der Tuuk, president of Graphic Technology Inc., on Olathe, Kans., company that twice made it to the INC. 500, a ranking of the fastest-growing private companies in the United States, before it went public in December. "You're in the public domain whether you like it or not. It has positive and negative aspects. I really feel sorry for TIE."

TIE, of course, was not the only company whose stock got caught up in the Journal controversy. A few days after the TIE column, "Heard on the Street" was critical of Miami-based Key Pharmaceuticals Inc., a three-time entry in the INC. 100, the list of the fastest-growing public companies in America. That column, too, had been preceded by a spurt of short sales.

"We didn't like it, although we weren't sure what was going on," says Daniel Bell, Key's senior vice-president of operations. We didn't know all the facts until some time later. It's not a daily topic of conversation, but we do believe it affected our stock price. But you can't undo the damage that was done, particularly to smaller shareholders All publicly held companies are open to shenanigans like that."