CEO Zuckerberg Skips Main Pitch but Holds Private Meetings With Some Firms
BOSTON—Facebook Inc.'s roadshow hit Boston on Tuesday—this time with a main presentation that didn't include Chief Executive Mark Zuckerberg, omitted a stale video pitch and provided attendees with more time for questions than Monday's New York session offered.
Afterward, some attendees said they felt emboldened to invest. Others complained that founder Mr. Zuckerberg didn't appear.
Mr. Zuckerberg did attend private meetings at major asset managers in Boston, said people familiar with the matter, including at Fidelity Investments,Wellington Management and BlackRock Inc.
Mr. Zuckerberg, who participated in the main New York session, is dividing duties on the roadshow with the social network's executives, according to a person familiar with the matter.
Tuesday's main presentation, part of a series of pitches to investors for Facebook's initial public offering expected May 18, was held under tight security at Boston's Four Seasons Hotel, not far from Facebook's ancestral homeland at Harvard University. The city is home base for several money-management firms large and small, including Fidelity and Putnam Investments.
Last week, Facebook set the price range for its shares at $28 to $35 a share, targeting a valuation as rich as $96 billion in what would be a record debut for an American company.
Some investors at Monday's New York presentation complained about a 30-minute corporate video, which had been widely distributed beforehand. They also said there wasn't enough time for questions; executives fielded about six questions over 20 minutes, said the attendees.
On Tuesday, Facebook executives made adjustments to the presentation, bypassing the video. Facebook Chief Financial Officer David Ebersman and Chief Operating Officer Sheryl Sandberg answered questions on issues such as the social network's mobile strategy and its ability to capitalize on user information for targeted advertisements, attendees said.
But for many people who came out in the rain for the 7:15 a.m. breakfast, which included smoked salmon, bagels and fruit, Mr. Zuckerberg's absence proved a disappointment.
"I think if you're going to take public money, you should be at public meetings," said attendee Lawrence Haverty, Jr., associate portfolio manager of Gabelli Global Multimedia Trust, which is based in Weston, Mass.
Mr. Haverty added that not having the Facebook chief there "made it hard to get a feel for the guy" and "imagine what's in his head."
Yet Mr. Haverty still left the breakfast bullish on Facebook.
"Virtually every growth investor in the world is going to want to own this thing and there aren't enough shares," said Mr. Haverty, who said he plans to invest in the company.
Dana Cease, a senior investment analyst at John Hancock Asset Management in Boston, also was disappointed in Mr. Zuckerberg's absence. "I can understand why the company would want to limit his exposure," but potential investors want to hear from the controlling shareholder, he said. "I would have liked to see him out there at least answering some broader questions," Mr. Cease said. "It would be good to have some comfort."
Mr. Cease sees Facebook's valuation as attractive in the company's current targeted range, although he would be wary if the stock reaches the mid-$40-a share range or higher. He sees a Facebook investment as a bet on the company emerging as a hub for "the social web," and not merely as platform for display-based ads. "It's really a huge opportunity we don't know if they're going to capitalize on," Mr. Cease said.
Another bullish investor at the breakfast, Alex Forse, a research analyst at money-management firm Essex Investment Management Company LLC in Boston, wasn't bothered that Mr. Zuckerberg didn't make the event. Mr. Forse said he was glad for the chance to hear from other executives, and said Mr. Ebersman made a key comment by pointing out Facebook doesn't pay for content. Users create it.
"I really do feel Facebook is strategically a core holding if you are a dynamic growth investor," said Mr. Forse, who expects Facebook shares could eventually trade significantly above the initial $28 to $35 a share-price range Facebook set last week. The share sale is expected at the end of next week.
Other attendees said—despite a persuasive appearance by Ms. Sandberg and Mr. Ebersman—they were still unsure whether they'd invest.
"I still have some reservations about whether they can grow into the valuation," said Michael Mullaney, the vice president of Fiduciary Trust Company, a private wealth-management firm in Boston.
Still, the roadshow appeared to make a positive impression. After hearing directly from Facebook executives, Mr. Mullaney felt the company appears to have a "definite plan" and that he felt "more comfortable with its story than I was prior to this."
He wasn't bothered by Mr. Zuckerberg's absence. Indeed, in a city known for its buttoned-down and sensible demeanor, Facebook's hip, West Coast image isn't always a plus.
"What came across, and not to malign Mark Zuckerberg, was that there were no 'hoodies,'" Mr. Mullaney said, referring to the Facebook chief's attire in New York on Monday. "These were business people who know how to run a business."Shayndi Raice, Ryan Dezember and David Benoit
contributed to this article.