Facebook brings IPO road show to Silicon Valley

May 15, 2012 7:37:50 AM PDT
Anyone with a Facebook page knows how popular the social network is, but investors are a hard crowd to please. They ask tough questions before they plop down millions, even billions of dollars, in a newly public company.

That's why Facebook has been doing a coast-to-coast road show, and on Friday, that show returned to the Bay Area.

This is a week when Mark Zuckerberg has been playing rock star, his face obscured in SUVs by tinted glass, driven in a caravan with security to a gathering of investors.

The road show was private, so no cameras were allowed at the hotel. But we learned Zuckerberg wore a gray T-shirt and fed his guests curry chicken salad. He was criticized for wearing a hoodie Monday when meeting with investors in New York.

The 200 invited guests are being invited to snap up billions of dollars of stock when Facebook goes public next Friday.

"I think it was pretty subdued. I think a lot of people are trying to understand what it's worth," said Chris Nawn of Integral Capital Partners. "I think everyone believes it's a real business, and it's going to go some place. But I think people are trying to figure out in the near term what is it worth? So we'll all make that decision."

We're told questions were raised about monetization -- how Facebook will boost profits from online and mobile ads. Facebook acknowledges it lags in making money on mobile devices.

That admission may dampen some enthusiasm for the IPO, but only slightly, according to Kevin Spain of Emergence Capital Partners.

"This is in many ways the IPO of the decade, and so I think for that reason and also for the reason that the fundamentals of the business -- beyond some of the revenue numbers, the usage metrics, the active user metrics -- because those are so positive I think you're going to find many investors still getting very excited about participating in the offering," Spain said.

Facebook posted a video online ahead of the road show to sell itself to investors. But it wasn't played Friday because many have seen it already. What some potential investors wanted was the chance to see and hear from Zuckerberg in person.

"This will be the first time to see Zuckerberg in action and to see the team and see how, what the give and take is like with the investment community and see how open they're going to be relative to communicating with Wall Street about what we should expect," said Rob Romero of Connetive Capital.

Even though investors will eventually become the owners of Facebook, they won't control it. Zuckerberg holds a special class of stock that trumps regular shareholders.


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