Facebook Inc. chief executive Mark Zuckerberg is meeting would-be investors as the largest social-networking service begins marketing its initial public offering, said a person with knowledge of the matter.
Facebook, after meeting potential shareholders in New York Monday, has arranged meetings in Boston and Palo Alto, Calif., this week. The person who discussed Zuckerberg’s attendance asked not to be identified because the meetings are private. CNBC televised footage of a hooded sweatshirt-clad Zuckerberg arriving at the Sheraton New York Hotel.
Facebook plans to raise as much as $11.8 billion in its IPO, the biggest ever for an Internet company. Zuckerberg, 27, has had to pitch his business model during Facebook’s years as a private company and probably won’t 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.
Chief operating officer Sheryl Sandberg is among executives pitching the IPO to investors, and she appears in a promotional video to tout the company’s mobile prospects. Zuckerberg and chief financial officer David Ebersman also are featured in the video, which was posted online last week.
The Menlo Park, Calif.-based company is seeking a market value of as much as $96 billion. Facebook is offering 337.4 million shares at $28 to $35 each, and is scheduled to price the offering May 17, data compiled by Bloomberg show. The shares will be listed on the Nasdaq Stock Market under the symbol FB. Morgan Stanley, JPMorgan Chase & Co., and Goldman Sachs Group Inc. are leading the sale.
Facebook is offering 180 million shares, while existing owners such as Accel Partners, Goldman Sachs, and Digital Sky Technologies are offering 157.4 million shares. Zuckerberg is offering 30.2 million of his 533.8 million shares, and may control about 57 percent of the voting power of Facebook’s capital stock outstanding after the offering, the filing shows.
“His attendance might demonstrate that the company processed the message that Mark’s absolute voting control makes his presence, at least at some of the larger meetings, much more important than would otherwise be the case,” Lise Buyer, principal at Class V Group in Portola Valley, Calif., said in an e-mailed statement. “The company’s job, Mark, Sheryl, David together, is to convince investors that Facebook’s brightest days are ahead and that therefore, there is significant room for an increase in the company’s value from here.”
Sandberg, who isn’t selling in the IPO, holds 1.9 million shares.
The initial share sale would eclipse the 2004 IPO of Google Inc., the world’s most valuable Internet company. Google’s offering, the same year Zuckerberg helped found Facebook, raised $1.9 billion and valued the company then at about $23 billion.
CNBC earlier reported that Zuckerberg would attend the New York meeting.