Facebook chief pushes share float to investors

By Brian Womack

Facebook chief executive Mark Zuckerberg touted growth prospects for the largest social network yesterday in a meeting with hundreds of would-be investors ahead of its record initial public offering.

Investors watched a video featuring pitches by Zuckerberg, chief operating officer Sheryl Sandberg and chief financial officer David Ebersman, and then asked questions of the trio, said several people who attended the meeting at the Sheraton New York Hotel.

The executives discussed their reasons for acquiring photo-sharing site Instagram and told investors they were optimistic about potential for future gains at Facebook.

Facebook plans to raise as much as US$11.8 billion ($14.8 billion) in its IPO, the biggest for an internet company.

Zuckerberg, 27, had had to pitch his business model during Facebook's years as a private company and probably would not have trouble communicating the mission to prospective public investors, said Herman Leung, an analyst at Susquehanna International Group.

"It's important to hear directly from him for investors who are about to put millions and millions of dollars into a company," said Leung, who is based in San Francisco.

"Convincing others now they should buy shouldn't be that hard for a company that has amassed a user base of over 900 million."

Potential investors waited in a line that snaked through the hotel's lobby and around the side of the building for a meeting that started about an hour late.

"The questions were all towards long-term elements of the business," said Samuel Schwerin, managing partner at Millennium Technology Value Partners in New York.

Schwerin attended the meeting, and said he would add more shares in the IPO. "One of the things I was surprised by was the level of interest in the fundamental elements of how the company grows and how early it is in the value-creation story for Facebook."

Executives addressed Facebook's slowdown in revenue growth, saying the company now faced a larger base of users and was working to be useful to them and advertisers, according to those at the meeting.

Facebook is working on ways to make money from mobile users, and on getting partners besides gamemaker Zynga Inc to use its platform and currency, which is used to buy so-called virtual goods.

Zuckerberg told investors that the US$1 billion Instagram acquisition, announced last month, was contemplated over a long period. He said he had watched the company grow for a while. He said opportunities like Instagram were unique.

The initial share sale would eclipse the 2004 IPO of Google, the world's most valuable internet company. Google's offering, the same year Zuckerberg helped found Facebook, raised US$1.9 billion and valued the company then at about US$23 billion.

- Bloomberg

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