May 8, 2012
Facebook’s Zuckerberg Kicks Off Cross-country IPO Roadshow
Facebook Inc. CEO Mark Zuckerberg kicked off a cross-country roadshow at New York City's Sheraton Hotel on Monday, pitching the company´s stock to some 500 prospective investors for an initial public offering expected sometime next week.
Wearing his trademark jeans, sweatshirt and sneakers, Zuckerberg and other members of Facebook´s executive team, including chief operating officer Sheryl Sandberg and chief financial officer David Ebersman, are seeking to raise about $10.6 billion.
The trio took a series of questions ranging from the company´s slowing revenue growth to its $1 billion purchase of mobile app maker Instagram — something the 27-year-old Zuckerberg said he would do again if he had to. Zuckerberg personally fashioned the acquisition in a matter of days last month with little input from Facebook's board of directors, according to media reports. Zuckerberg said Facebook decided to move forward with the purchase when it saw Instagram's user data had crossed a "tipping point" from which they believed it would grow significantly. Facebook acted quickly when it became clear that Instagram was open to being acquired, he said.
Zuckerberg had indicated last week that Facebook´s initial public offering would be at a price of $28 to $35 per share, which would value the company at $77 billion to $96 billion — the largest technology IPO in history. Many observers say they expect Facebook to raise its offer price range as the roadshow progresses.
Although Facebook has not officially announced a date for its IPO, most reports agree the company will price its IPO the evening of May 17 and begin trading the next day on the Nasdaq exchange under the ticker FB.
Attendees at Monday´s kickoff event, which was closed to the media, were asked for multiple forms of identification, and crosschecked against a list of names.
Reports suggest the high turnout may be an indication of significant investor interest in Facebook, the 8-year-old popular social network that began as a project for Zuckerberg while he was a student at Harvard University. The site has now grown to include more than 900 million users.
The vast size of the IPO reflects Facebook's optimistic expectations about its revenue-generating potential as a center for everything from advertising to commerce.
However, despite the excitement over the company´s public offering there are gnawing concerns about the longer-term growth prospects and Zuckerberg's 57 percent majority voting control after the IPO.
When asked by prospective investors about any potential plans to enter China, Zuckerberg noted that Facebook was blocked in China — along with other popular U.S. websites such as Twitter.
Sandberg said the company would be willing to talk to officials with the Chinese government to discuss potential partnerships.
Analysts say Facebook must develop ways to generate revenue from the growing number of users who access the social network on mobile devices. Facebook currently earns most of its revenue from advertising, and only recently began offering limited ads on the mobile version of its service.
Facebook´s U.S. mobile users spent, on average, 441 minutes on the site in March, while users who accessed the social network from their computer spent 391 minutes on the site, according to data released Monday by comScore.
Facebook's executives and its team of underwriters, including Morgan Stanley's Michael Grimes and JPMorgan's Jimmy Lee, will be in Boston on Tuesday for the next stop of their nine-day roadshow. From there, they will travel across the United States with stops in Chicago, Baltimore and possibly Los Angeles before wrapping up in Menlo Park, California on May 16, according to research firm IPO Boutique.