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Mark Zuckerberg kicks off Facebook roadshow to pitch IPO

May 07, 2012|By Jessica Guynn
  • Mark Zuckerberg, co-founder and chief executive of Facebook, leaves the Sheraton hotel in New York after pitching the company to would-be investors.
Mark Zuckerberg, co-founder and chief executive of Facebook, leaves the… (Scott Eells / Bloomberg )

Mark Zuckerberg, the 27-year-old co-founder and chief executive of Facebook dressed in trademark hoodie and jeans, kicked off a cross-country roadshow to pitch his company's initial public stock offering.

Hundreds of institutional investors stood in long lines Monday to pile into a ballroom at New York's Sheraton Hotel to hear the billion-dollar pitch from the 8-year-old social network ahead of the hotly anticipated IPO. The meeting was closed to the media.

Facebook is building excitement for the IPO that in a few weeks could value the company at $96 billion or more. That would make it the largest offering to come out of  Silicon Valley. The Menlo Park, Calif., company said last week that it's offering 337.4 million shares at $28 to $35 each.

Investors expect that price range to jump as the roadshow makes its way across the nation, including stops in Boston and Chicago. Facebook plans to raise as much as $11.8 billion in its IPO. It's expected to price the offering on May 17 and begin trading the next day. The shares will be listed on the Nasdaq Stock Market under the symbol FB.

The presentation was more than an hour late in getting started and began with a slickly produced video, which frustrated some would-be investors who say they only got the opportunity to ask eight questions.

Zuckerberg was accompanied by Chief Financial Officer David Ebersman, in suit and tie, and his company's chief operating officer, Sheryl Sandberg, in business attire. They fielded questions about Facebook's slowing revenue growth and its $1 billion purchase of Instagram.

The executives said they were confident that Facebook's growth would continue. Zuckerberg called Instagram a "good deal" and said he would buy Instagram again.

"All in all, it wasn't extremely penetrating," said one investor who added that he had never seen anything like the heightened security.

Susquehanna Financial Group analyst Herman Leung expects Facebook's revenue to grow 40% this year and 33% in 2013, he said in a note to investors Monday. He said the $28 to $35 range was a "compelling entry point" for investors.

"It’s generally agreed upon amongst investors that the Facebook IPO will be very successful and Facebook as a company will be very successful," said Anthony Valencia, media analyst at TCW Group who attended the event. "What is not agreed upon is how much upside there will be for new investors."

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