Some of the hundreds of investors who piled in to the New York Sheraton Hotel for Facebook’s first major IPO presentation left the room “unsated,” according to one attendee — annoyed by enormous lines to check in and feeling shortchanged by a briefer-than-expected question-and-answer session with management.
Over chicken, salad, and cookies, hundreds of major New York institutional investors listened to Facebook brass field inquiries about how the company could keep up its breakneck growth and continue raising robust amounts of revenue with new advertisers.
Some had waited an hour to get in to the luncheon, which was mobbed with potential share buyers, members of the media, and onlookers alike.
Management presenters, which included a jeans-and-hoodie clad CEO and founder Mark Zuckerberg, who was in the men’s room when the questioning started, as well as COO Sheryl Sandberg and CFO David Ebersman, who were wearing more traditional business apparel, said they were confident that Facebook’s expansion would continue.
Asked whether the first-quarter revenue numbers were evidence of slowing growth, Ebersman said he thought comparing this past quarter to the same period a year ago was unfair, said a second attendee, because the online-payments business Facebook founded last year through the game maker Zynga provided a huge revenue boost that was unlikely to be repeated.
Facebook brass was also asked about its recent $1 billion purchase of the photo-sharing site Instagram, said the attendee. Zuckerberg replied that he was excited about the deal and that he’d “do it again,” this person recalled. Another question to Zuckerberg: whether Internet companies’ restricted access to the Chinese market would bedevil the social network. Sandberg, who fielded that query, said that the issue lay more with the Chinese government than with Facebook.
Addressing more questions about the company’s growth potential, the management team said that Facebook has worked with Nielsen to study its advertising campaigns, according to one luncheon attendee, and has discovered, among other things, that friend recommendations and other networking tools can make ads three times more effective on the site than in other places. Advertisers are increasingly aware of the social network’s success as a destination for their message, management added.
Meanwhile, the scene outside the hotel was one for the IPO history books. Entrants to the luncheon were required to show two forms of ID, which were reviewed by one of a team of dozens of guards. “I’ve never been to a presentation or offering with this kind of security — on multiple levels,” said another attendee. “I went to the bathroom and one of the guards escorted me there and back.”
By the time the meeting ended around 2 p.m., some attendees felt they hadn’t been given enough time to ask more questions, according to exiting investors. One particular source of ire: that luncheon participants had been forced to watch a film about Facebook rather than using that time to converse with Zuckerberg, Sandberg, and Ebersman. Still, not one said that the handling of the luncheon meeting would affect their desire to buy Facebook shares.
The expected schedule of the Facebook roadshow is:
May 8 - Boston
May 9 - Baltimore, Philadelphia
May 10 - Either more mid-Atlantic or west coast
May 11 - Palo Alto lunch
May 14 - Chicago
May 15 - other Midwest location TBA
May 16 and 17 - West Coast
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