Facebook's Zuckerberg kicks off investor show in New York

NDTV Profit Desk

12 May 2012, 05:55 PM IST

Newly-elected French President Francois Hollande (L) with outgoing Culture Minister Frederic Mitterrand

Facebook Inc kicked off its IPO roadshow in New York on Monday, attracting hundreds of investors who formed a snaking line around the block keen on hearing CEO Mark Zuckerberg tout Silicon Valley's record $10 billion initial public offering.

Zuckerberg, wearing jeans and a sweatshirt, arrived in a black SUV at the Sheraton Hotel in midtown Manhattan shortly before 1 p.m. He was accompanied by finance chief David Ebersman, who was smiling in a suit and tie and toting a backpack, as well as several other individuals.

The world's largest social network aims to raise about $10.6 billion, dwarfing the coming-out parties of tech companies like Google Inc and granting it a market value close to Amazon.com Inc's.

Investors are expected to flock to the highly anticipated IPO, despite persistent concerns about Facebook's longer-term growth and 27-year-old Zuckerberg's majority control.

The 8-year-old social network that began as Zuckerberg's Harvard dorm room project indicated an IPO range of $28 to $35 a share on Thursday, which would value the company at $77 billion to $96 billion.

The size of the IPO reflects the company's growth and bullish expectations about its money-making potential as a hub for everything from advertising to commerce. Many investors say they expect Facebook to raise its offer price-range as the roadshow progresses from New York to major cities such as Chicago, Boston and San Francisco.

Investors formed a line outside the Sheraton Hotel about an hour before the roadshow started on Monday morning, as a nearby media throng awaited the arrival of Facebook executives and elicited inquiries from curious passers-by.

Inside, Morgan Stanley banker Michael Grimes took the stage to begin the formal presentation as the audience of investors lunched on Cobb salad, ice tea and cookies, attendees said.

With 900 million users, Facebook is challenging established Web businesses such as Google Inc and Yahoo Inc for consumers' online time and advertising dollars.

Susquehanna Financial Group analyst Herman Leung said in a note to investors on Monday that he expected Facebook's revenue to grow 40 percent this year and 33 percent in 2013.

He said the $28 to $35 range for Facebook shares was an "attractive" valuation that provided a "compelling entry point" for investors.

In a separate note published Sunday, Pivotal Research Group analyst Brian Wieser put a $30 price target on shares of Facebook.

"We would not be surprised if the stock trades up above the IPO price on retail interest in the company over the near term," he wrote.